AGREEMENT OF MERGER
AMONG
UNITED PARCEL SERVICE, INC.,
OLYMPIC MERGER SUB, INC.
AND
OVERNITE CORPORATION
DATED AS OF MAY 15, 2005
AGREEMENT OF MERGER
TABLE OF CONTENTS
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PAGE
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ARTICLE I. DEFINITIONS......................................................... 1
SECTION 1.1..... Certain Definitions......................................... 1
ARTICLE II. THE MERGER......................................................... 7
SECTION 2.1. The Merger.................................................. 7
SECTION 2.2. Effective Time; Closing..................................... 7
SECTION 2.3. Effect of the Merger........................................ 7
SECTION 2.4. Conversion of Company Common Stock.......................... 7
SECTION 2.5. Surrender of Shares of Company Common Stock; Stock Transfer
Books....................................................... 8
SECTION 2.6. Company Stock Awards........................................ 10
ARTICLE III. THE SURVIVING CORPORATION......................................... 11
SECTION 3.1. Articles of Incorporation................................... 11
SECTION 3.2. Bylaws...................................................... 11
SECTION 3.3. Directors and Officers...................................... 11
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................... 11
SECTION 4.1. Organization and Standing................................... 11
SECTION 4.2. Authority for Agreement..................................... 11
SECTION 4.3. Capitalization.............................................. 12
SECTION 4.4. Subsidiaries................................................ 12
SECTION 4.5. No Conflict................................................. 13
SECTION 4.6. Required Filings and Consents............................... 13
SECTION 4.7. Compliance.................................................. 13
SECTION 4.8. Litigation.................................................. 14
SECTION 4.9. Reports; Financial Statements............................... 14
SECTION 4.10. Absence of Certain Changes or Events........................ 15
SECTION 4.11. Taxes....................................................... 15
SECTION 4.12. Title to Personal Property.................................. 16
SECTION 4.13. Real Property............................................... 16
SECTION 4.14. Environmental Compliance and Disclosure..................... 18
SECTION 4.15. Officers and Employees...................................... 19
SECTION 4.16. Employee Benefit Plans...................................... 19
SECTION 4.17. Labor Relations............................................. 21
SECTION 4.18. Contracts and Commitments................................... 22
SECTION 4.19. Proxy Statement, Etc. ...................................... 23
SECTION 4.20. Intellectual Property....................................... 23
SECTION 4.21. Insurance Policies.......................................... 24
SECTION 4.22. Notes Receivable............................................ 25
SECTION 4.23. Transactions with Affiliates................................ 25
SECTION 4.24. Customer and Supplier Relations............................. 25
SECTION 4.25. Ethical Practices........................................... 25
SECTION 4.26. Customs Matters............................................. 26
SECTION 4.27. Government Contracts........................................ 26
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SECTION 4.28. No Existing Discussions..................................... 26
SECTION 4.29. Antitakeover Statutes....................................... 26
SECTION 4.30. Brokers..................................................... 27
SECTION 4.31. Vote Required............................................... 27
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.................... 27
SECTION 5.1. Organization and Standing................................... 27
SECTION 5.2. Authority for Agreement..................................... 27
SECTION 5.3. No Conflict................................................. 27
SECTION 5.4. Required Filings and Consents............................... 28
SECTION 5.5. Information Supplied........................................ 28
SECTION 5.6. Brokers..................................................... 28
SECTION 5.7. Ownership of Sub............................................ 28
ARTICLE VI. COVENANTS.......................................................... 28
SECTION 6.1. Conduct of the Business Pending the Merger.................. 28
SECTION 6.2. Access to Information; Confidentiality...................... 30
SECTION 6.3. Notification of Certain Matters............................. 30
SECTION 6.4. Further Assurances.......................................... 30
SECTION 6.5. Board Recommendations....................................... 31
SECTION 6.6. Shareholder Litigation...................................... 32
SECTION 6.7. Indemnification............................................. 32
SECTION 6.8. Public Announcements........................................ 33
SECTION 6.9. Acquisition Proposals....................................... 33
SECTION 6.10. Shareholders' Meeting....................................... 34
SECTION 6.11. Proxy Statement............................................. 34
SECTION 6.12. Shareholder Lists........................................... 34
SECTION 6.13. Undertakings of Parent...................................... 34
SECTION 6.14. Director Resignations....................................... 34
SECTION 6.15. Company Stock Awards........................................ 35
SECTION 6.16. Employee Matters............................................ 35
ARTICLE VII. CONDITIONS........................................................ 36
SECTION 7.1. Conditions to the Obligation of Each Party.................. 36
SECTION 7.2. Conditions to Obligations of Parent and Sub to Effect the
Merger...................................................... 36
SECTION 7.3. Conditions to Obligations of the Company to Effect the
Merger...................................................... 37
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER................................ 37
SECTION 8.1. Termination................................................. 37
SECTION 8.2. Effect of Termination....................................... 38
SECTION 8.3. Amendments.................................................. 39
SECTION 8.4. Waiver...................................................... 39
ARTICLE IX. GENERAL PROVISIONS................................................. 39
SECTION 9.1. No Third Party Beneficiaries................................ 39
SECTION 9.2. Entire Agreement............................................ 39
SECTION 9.3. Succession and Assignment................................... 40
SECTION 9.4. Counterparts................................................ 40
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SECTION 9.5. Headings.................................................... 40
SECTION 9.6. Governing Law............................................... 40
SECTION 9.7. Severability................................................ 40
SECTION 9.8. Specific Performance........................................ 40
SECTION 9.9. Construction................................................ 40
SECTION 9.10. Non-Survival of Representations and Warranties and
Agreements.................................................. 40
SECTION 9.11. Fees and Expenses........................................... 40
SECTION 9.12. Notices..................................................... 40
EXHIBITS
Exhibit A Plan of Merger
Exhibit B Articles of Incorporation of the Surviving Corporation
Exhibit C Bylaws of the Surviving Corporation
Exhibit D Other Actions
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AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER (this "Agreement"), dated as of May 15, 2005, by
and among United Parcel Service, Inc., a Delaware corporation ("Parent"),
Olympic Merger Sub, Inc., a Virginia corporation ("Sub") and indirect wholly
owned subsidiary of Parent, and Overnite Corporation, a Virginia corporation
(the "Company").
WITNESSETH:
WHEREAS, the parties to this Agreement desire to effect the acquisition of
the Company by Parent;
WHEREAS, in furtherance of the foregoing, upon the terms and subject to the
conditions of this Agreement, including the Plan of Merger in the form attached
hereto as Exhibit A (the "Plan of Merger"), and in accordance with the Virginia
Stock Corporation Act (the "VSCA"), Sub will merge with and into the Company
(the "Merger"), with the Company as the surviving corporation;
WHEREAS, the Board of Directors of the Company unanimously (i) determined
that this Agreement, the Plan of Merger and the transactions contemplated
herein, including the Merger, are advisable, fair to and in the best interests
of the Company and the Company Shareholders (as defined hereafter), (ii)
approved and adopted this Agreement, the Plan of Merger and the transactions
contemplated herein, including the Merger, and (iii) recommended approval and
adoption of this Agreement, the Plan of Merger and the transactions contemplated
herein, including the Merger, by the Company Shareholders; and
WHEREAS, the respective Board of Directors of Parent and Sub, and United
Parcel Service of America, Inc., as the sole shareholder of Sub ("UPSOA"), have
each approved and adopted this Agreement, the Plan of Merger and the
transactions contemplated herein, including the Merger, upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements contained in this
Agreement and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings set forth in this Section.
(a) "10-K" means the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2004.
(b) "Acquisition Agreement" has the meaning set forth in Section
6.5(b).
(c) "Acquisition Proposal" has the meaning set forth in Section 6.9.
(d) "ADA" means the Americans with Disabilities Act.
(e) "ADEA" means the Age Discrimination in Employment Act.
(f) "Affiliate" of a party means an "affiliate" of such party as that
term is used in paragraphs (c) and (d) of Rule 145 under the Securities Act
(including at a minimum, all those Persons subject to the reporting
requirements of Rule 16(a) under the Exchange Act).
(g) "Agreement" has the meaning set forth in the Preamble.
(h) "Applicable Benefit Laws" means ERISA, the Code and all other
Laws, regulations, orders or other legislative, administrative or judicial
promulgations, including those of a jurisdiction outside the United States
of America, applicable to Employee Benefits Plans.
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(i) "Alternative Transaction" has the meaning set forth in Section
6.5(b).
(j) "Associate" has the meaning set forth in Rule 12b-2 of the
Exchange Act.
(k) "Blue Sky Laws" means state securities or "blue sky" Laws.
(l) "CERCLA" means the Federal Comprehensive Environmental Response,
Compensation and Liability Act, as amended.
(m) "Certificate" means each certificate representing a share or
shares of Company Common Stock.
(n) "Code" means the Internal Revenue Code of 1986, as amended.
(o) "Combined Group" means (i) any "affiliated group" as defined in
Section 1504 of the Code or (ii) any combined or similar reporting group
for state, local, foreign or other tax purposes of which the Company or any
of the Subsidiaries has been a part.
(p) "Company" has the meaning set forth in the Preamble.
(q) "Company Articles of Incorporation" means the Company's Amended
and Restated Articles of Incorporation, dated as of September 8, 2003.
(r) "Company Benefit Plans" means each Employee Benefit Plan sponsored
or maintained or required to be sponsored or maintained at any time by the
Company or any Subsidiary, or to which the Company or any Subsidiary makes
or has made, or has or has had an obligation to make, contributions at any
time.
(s) "Company Bylaws" means the bylaws of the Company.
(t) "Company Charter Documents" means, collectively, the Company
Bylaws and the Company Articles of Incorporation.
(u) "Company Common Stock" means the Company's common stock, par value
$0.01 per share.
(v) "Company Disclosure Letter" means the Company Disclosure Letter
delivered by the Company to Parent prior to the execution of this
Agreement.
(w) "Company ESPP" has the meaning set forth in Section 2.6(b).
(x) "Company Financial Advisor" means Morgan Stanley & Co.
Incorporated.
(y) "Company Financial Statements" means the Company's consolidated
statements of financial position, consolidated statements of income,
consolidated statements of cash flows and consolidated statements of
changes in common shareholders' equity (including the notes thereto)
included in the SEC Reports.
(z) "Company Insurance Policies" means all insurance policies which at
any time since the Spin-Off Date named the Company, any Subsidiary, or any
of their respective directors, officers or employees as an insured or
beneficiary or as a loss payable payee or for which the Company or any
Subsidiary since the Spin-Off Date has paid or is or was obligated to pay
all or part of the premiums.
(aa) "Company Licensed Software" means all third party software (other
than Company Proprietary Software or standard, off-the-shelf third party
personal computer or server-based products such as word processing,
accounting, spreadsheet programs, or so forth) licensed to the Company and
the Subsidiaries.
(bb) "Company Material Adverse Effect" means any change, event,
circumstance or effect shall have occurred or been threatened that, when
taken together with all other adverse changes, events, circumstances or
effects that have occurred or been threatened, (i) is or is reasonably
likely to be materially adverse to the business, operations, properties,
condition (financial or otherwise), assets or
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liabilities (including contingent liabilities) of the Company and the
Subsidiaries taken as a whole or (ii) prevents or materially delays the
performance by the Company of any of its obligations under this Agreement
or the consummation of the Merger or the other transactions contemplated
herein, except, in the case of (i) above, to the extent resulting from (A)
any changes in general United States or global economic conditions or any
changes in the industry in which the Company operates; provided that any
such change does not adversely affect in a materially disproportionate
manner the Company and the Subsidiaries taken as a whole as compared to
similarly situated businesses; (B) any changes to financial or securities
markets (including any disruption thereof and any decline in the price of
any security, including the Company Common Stock, or market index, in each
case, in and of itself); provided that any such change does not adversely
affect in a materially disproportionate manner the Company and the
Subsidiaries taken as a whole as compared to similarly situated businesses;
(C) any changes, events, circumstances or effects resulting from entering
into this Agreement or the announcement thereof or the pendency or
consummation of the transactions contemplated hereby, including any changes
relating to the workforce of the Company and its Subsidiaries; and (D) any
changes in applicable Law or GAAP or the interpretation thereof after the
date of this Agreement; provided that any such change does not adversely
affect in a materially disproportionate manner the Company and the
Subsidiaries taken as a whole as compared to similarly situated businesses.
(cc) "Company Preferred Stock" means the Company's preferred stock,
par value $0.01 per share.
(dd) "Company Proprietary Software" means all software owned by the
Company and the Subsidiaries.
(ee) "Company Restricted Stock Award" means an award of restricted
Company Common Stock.
(ff) "Company Shareholder" means any holder of Company Common Stock.
(gg) "Company Software" means the Company Licensed Software together
with the Company Proprietary Software.
(hh) "Company Stock" means the Company Common Stock together with the
Company Preferred Stock.
(ii) "Company Stock Award Consideration" means the aggregate amounts
payable under Sections 2.6(a), 2.6(b) and 2.6(c) and the employer
employment tax liability for the Company Stock Award Consideration.
(jj) "Company Stock Award Plans" means any plan or arrangement or
agreement relating to stock options, restricted stock, stock appreciation
rights, performance shares, restricted stock units, dividend equivalents or
other equity based awards of the Company listed in the Company Disclosure
Letter, including the Stock Incentive Plan and the Executive Incentive
Plan.
(kk) "Company Stock Awards" means all outstanding options or other
rights to acquire Company Common Stock, including any stock appreciation
rights, restricted stock, performance shares, restricted stock units,
dividend equivalents or other equity based awards granted under the Company
Stock Award Plans.
(ll) "Company Stock Option" has the meaning set forth in Section
2.6(a)(i).
(mm) "Company Stock Option Consideration" has the meaning set forth in
Section 2.6(a)(i).
(nn) "Confidentiality Agreement" means the confidentiality agreement
between United Parcel Service General Services Co. and the Company, dated
February 21, 2005.
(oo) "Current Company Benefit Plan" has the meaning set forth in
Section 4.16(a).
(pp) "Customer Inventory" means the materials, products or other
substances held by the Company or any Subsidiary for the account of a
customer of the Company or any Subsidiary.
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(qq) "Customs" has the meaning set forth in Section 4.26.
(rr) "Effective Time" has the meaning set forth in Section 2.2.
(ss) "Employee/Consulting Agreements" means any contracts, consulting
agreements, termination or severance agreements, change of control
agreements or any other agreements respecting the terms and conditions of
employment or of an independent contractor relationship with respect to any
officer, employee or former employee, or consultant or independent
contractor who is performing services exclusively for the Company or any
Subsidiaries.
(tt) "Employee Benefit Plan" means with respect to any Person each
plan, fund, program, arrangement or scheme (collectively, "Plan"),
including, but not limited to each Plan maintained or required to be
maintained under the Laws of a jurisdiction outside the United States of
America (other than a Plan maintained solely to comply with applicable
workers' compensation law, social security law, mandated benefit laws or
other similar Laws (in each case, only to the extent the Plan is no more
generous than the mandatory minimum requirements under such laws)), in each
case, that is at any time sponsored or maintained or required to be
sponsored or maintained by such Person or to which such Person makes or has
made, or has or has had an obligation to make, contributions providing for
employee benefits or for the remuneration, direct or indirect, of the
employees, former employees, directors, officers, consultants, independent
contractors, contingent workers or leased employees of such Person or the
dependents of any of them (whether written or oral), including each
deferred compensation, bonus, incentive compensation, pension, retirement,
stock purchase, stock option and other equity compensation plan, "welfare"
plan (within the meaning of Section 3(1) of the ERISA, determined without
regard to whether such Plan is subject to ERISA); each "pension" plan
(within the meaning of Section 3(2) of ERISA, determined without regard to
whether such plan is subject to ERISA); each severance plan or agreement,
health, vacation, summer hours, supplemental unemployment benefit,
hospitalization insurance, medical, dental, legal and each other employee
benefit plan, fund, program, arrangement or scheme.
(uu) "Environmental Laws" means local, state and federal Laws and
regulations relating to protection of the environment, pollution control,
product registration and management, release, or disposal of Hazardous
Materials.
(vv) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
(ww) "ERISA Affiliate" means any Person (whether incorporated or
unincorporated), that together with the Company or any Subsidiary would be
deemed a "single employer" within the meaning of Section 414 of the Code.
(xx) "ERISA Affiliate Plan" means each Employee Benefit Plan sponsored
or maintained or required to be sponsored or maintained at any time by an
ERISA Affiliate or to which such ERISA Affiliate makes or has made, or has,
or has had, an obligation to make, contributions at any time.
(yy) "ESP Shares" has the meaning set forth in Section 2.6(c).
(zz) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(aaa) "Executive Incentive Plan" means the Company's Executive
Incentive Compensation and Deferral Plan.
(bbb) "FLSA" means the Fair Labor Standards Act.
(ccc) "FMLA" means the Family and Medical Leave Act.
(ddd) "Fund" has the meaning set forth in Section 2.5(a).
(eee) "GAAP" means generally accepted accounting principles in the
United States.
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(fff) "Governmental Entity" means any United States federal, state or
local or any foreign government or any court, administrative or regulatory
agency or commission or other governmental authority or agency, domestic or
foreign.
(ggg) "Government Reports" has the meaning set forth in Section
4.9(a).
(hhh) "Hazardous Materials" means any waste, pollutant, hazardous
substance, toxic, radioactive, ignitable, reactive or corrosive substance,
hazardous waste, special waste, controlled waste, industrial substance,
by-product, process intermediate product or waste, petroleum or petroleum-
derived substance or waste, chemical liquids or solids, liquid or gaseous
products, or any constituent of any such substance or waste, the use,
handling, storage, treatment or disposal of which by the Company is
governed by or subject to any applicable Environmental Law.
(iii) "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
(jjj) "Intellectual Property Rights" means the following and all
rights arising out of the following: all copyrights, trade names,
trademarks, trade secrets, service marks or patents (or applications
therefor) as to which the Company or any Subsidiary claim an ownership
interest.
(kkk) "Knowledge of the Company" means the actual knowledge of Leo H.
Suggs, Patrick D. Hanley, Gordon S. Mackenzie, John W. Fain, Mark B.
Goodwin, Paul A. Hoelting, David W. Barnett, Michael Mahan, M. Parker
Myers, Carol D. Miller, Lisa McKnight or Phil Warren following reasonable
inquiry of appropriate employees with respect to the referenced matters.
(lll) "Labor Laws" means all Laws and all contracts or collective
bargaining agreements governing or concerning labor relations, unions and
collective bargaining, conditions of employment, employment discrimination
and harassment, wages, hours or occupational safety and health, including,
without limitation, the United States Immigration Reform and Control Act of
1986, the United States National Labor Relations Act, the United States
Civil Rights Acts of 1866 and 1964, as amended, Equal Pay Act, ADEA, ADA,
FMLA, WARN, Occupational Safety and Health Act, the United States Davis
Bacon Act, the United States Walsh-Healy Act, the United States Service
Contract Act, United States Executive Order 11246, FLSA and the United
States Rehabilitation Act of 1973 and all rules and regulations promulgated
under such acts.
(mmm) "Landlord's Estoppel Certificate and Consent" has the meaning
set forth in Section 4.13(k).
(nnn) "Law" means any United States federal, state or local or any
foreign statute, law, rule, regulation, ordinance, code, order, judgment,
decree or any other requirement or rule of law.
(ooo) "Leased Real Property" has the meaning set forth in Section
4.13(b).
(ppp) "Licenses" means all notifications, licenses, permits (including
construction and operation permits), franchises, certificates, approvals,
exemptions, classifications, registrations and other similar documents and
authorizations issued by any Governmental Entity, and applications
therefor.
(qqq) "Licensed Rights" means the following and all rights arising out
of the following: all United States and foreign patents, trademarks, trade
names, service marks and copyrights that are licensed to the Company or any
of the Subsidiaries and that are material to the business of the Company
and its Subsidiaries.
(rrr) "Litigation" means claims, suits, actions, investigations or
indictments, Governmental Entity audits or administrative, arbitration or
other proceedings.
(sss) "LTIP Awards" has the meaning set forth in Section 6.16(c).
(ttt) "Merger" has the meaning set forth in the Recitals.
(uuu) "Merger Consideration" has the meaning set forth in Section
2.4(a).
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(vvv) "NLRB" means the United States National Labor Relations Board.
(www) "Option Agreements" shall have the meaning set forth in Section
2.6(a)(ii).
(xxx) "OSHA" means the Occupational Safety and Health Administration.
(yyy) "Parent" has the meaning set forth in the Preamble.
(zzz) "Parent Expenses" has the meaning set forth in Section 8.2(b).
(aaaa) "Parent Financial Advisor" means Bear, Stearns & Co. Inc.
(bbbb) "Paying Agent" has the meaning set forth in Section 2.5(a).
(cccc) "Person" means any individual, corporation, partnership
(general or limited), limited liability company, limited liability
partnership, trust, joint venture, joint-stock company, syndicate,
association, entity, unincorporated organization or government or any
political subdivision, agency or instrumentality thereof.
(dddd) "Plan" has the meaning set forth in Section 1.1(tt).
(eeee) "Plan of Merger" has the meaning set forth in the Recitals.
(ffff) "Proxy Statement" means the proxy statement to be mailed to the
Company Shareholders in connection with the Shareholders' Meeting.
(gggg) "Real Property" has the meaning set forth in Section 4.13(b).
(hhhh) "Representatives" means officers, directors, employees,
auditors, attorneys, financial advisors, lenders and other agents.
(iiii) "Required Vote" has the meaning set forth in Section 4.31.
(jjjj) "Restricted Stock Agreement" means an agreement evidencing a
Company Restricted Stock Award.
(kkkk) "Sarbanes-Oxley Act" has the meaning set forth in Section
4.9(b).
(llll) "SCC" has the meaning set forth in Section 2.2.
(mmmm) "SEC" means the Securities and Exchange Commission.
(nnnn) "SEC Reports" has the meaning set forth in Section 4.9(a).
(oooo) "Securities Act" means the Securities Act of 1933, as amended.
(pppp) "Shareholders' Meeting" means the meeting of the Company
Shareholders to be called to consider this Agreement, the Plan of Merger
and the transactions contemplated herein, including the Merger.
(qqqq) "Spin-Off Date" means November 5, 2003.
(rrrr) "Stock Incentive Plan" means the Company's Stock Incentive
Plan.
(ssss) "Sub" has the meaning set forth in the Preamble.
(tttt) "Subsequent Determination" has the meaning set forth in Section
6.5(b).
(uuuu) "Subsidiary" means any corporation, association, partnership,
limited liability company, joint venture or other legal entity of which the
Company (either directly or through or together with any other Subsidiary
of the Company), beneficially or of record owns, directly or indirectly,
50% or more of the capital stock or other equity interests.
(vvvv) "Superior Proposal" has the meaning set forth in Section
6.5(b).
(wwww) "Surviving Corporation" has the meaning set forth in Section
2.1.
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(xxxx) "Tax" (and, with correlative meaning, "Taxes") means any
federal, state, local or foreign income, gross receipts, property, sales,
use, license, excise, franchise, value-added tax, unclaimed property,
employment, payroll, premium, custom, withholding, duty, alternative or
added minimum, ad valorem, transfer or excise tax, or any other tax or
other like assessment or charge of any kind whatsoever, together with any
interest or penalty or addition thereto, whether disputed or not, imposed
by any Governmental Entity.
(yyyy) "Tax Return" means any return, report or similar statement
required to be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return, claim
for refund, amended return or declaration of estimated Tax.
(zzzz) "Termination Fee" means $24,500,000.
(aaaaa) "UPSOA" has the meaning set forth in the Recitals.
(bbbbb) "VSCA" has the meaning set forth in the Recitals.
(ccccc) "WARN" means the United States Worker Adjustment and
Retraining Notification Act.
ARTICLE II.
THE MERGER
SECTION 2.1. The Merger. Upon the terms and subject to the conditions of
this Agreement, and in accordance with the VSCA, at the Effective Time (as
hereinafter defined), Sub shall be merged with and into the Company. As a result
of the Merger, the separate corporate existence of Sub shall cease and the
Company shall continue as the surviving corporation following the Merger (the
"Surviving Corporation"). The corporate existence of the Company, with all its
purposes, rights, privileges, franchises, powers and objects, shall continue
unaffected and unimpaired by the Merger.
SECTION 2.2. Effective Time; Closing. As promptly as practicable, and in
any event no later than the date which is two business days after the
satisfaction or waiver of the conditions set forth in Article VII hereof, the
parties hereto shall cause the Merger to be consummated by filing the Articles
of Merger with the State Corporation Commission of Virginia (the "SCC") and by
making all other filings or recordings required under the VSCA in connection
with the Merger, in such form as is required by, and executed in accordance with
the relevant provisions of, the VSCA. The Merger shall become effective upon the
issuance of a certificate of merger by the SCC, or at such later time and date
as shall be specified in the Articles of Merger (the "Effective Time"). The
Closing shall be held on the date of the Effective Time at 10:00 a.m., Eastern
Daylight Time, at the offices of King & Spalding LLP, 191 Peachtree Street,
Atlanta, Georgia 30303, or at such other time and location as the parties hereto
shall otherwise agree.
SECTION 2.3. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the VSCA.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
the Company and Sub shall vest in the Surviving Corporation, and all debts,
liabilities, obligations, restrictions, disabilities and duties of the Company
and Sub shall become the debts, liabilities, obligations, restrictions,
disabilities and duties of the Surviving Corporation.
SECTION 2.4. Conversion of Company Common Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of Sub, the Company
or the holders of any of the following securities:
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time including shares covered by Company
Restricted Stock Awards (whether vested or unvested), but excluding shares
cancelled pursuant to Section 2.4(b), shall be cancelled and shall by
virtue of the Merger and without any action on the part of the holder
thereof be converted
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automatically into the right to receive an amount in cash equal to $43.25
payable, without interest, to the holder of such share of Company Common
Stock, upon surrender of the Certificate that formerly evidenced such share
of Company Common Stock and/or Restricted Stock Agreement in the manner
provided in Section 2.5 (the "Merger Consideration").
(b) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time that is owned by Parent or Sub
shall be cancelled and retired and cease to exist and no payment or
distribution shall be made with respect thereto.
(c) At the Effective Time, all shares of the Company Common Stock
converted pursuant to Section 2.4(a) shall no longer be outstanding and
shall automatically be cancelled and retired and cease to exist, and each
holder of a Certificate and/or Restricted Stock Agreement shall cease to
have any rights with respect thereto, except the right to receive the
Merger Consideration in accordance with Section 2.4(a).
(d) Each share of common stock, par value $0.01 per share, of Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and nonassessable
share of common stock, par value $0.01 per share, of the Surviving
Corporation and shall constitute the only outstanding shares of capital
stock of the Surviving Corporation.
SECTION 2.5. Surrender of Shares of Company Common Stock; Stock Transfer
Books.
(a) Not less than five days prior to the Shareholders' Meeting, Parent
shall designate a bank or trust company to act as agent (the "Paying Agent") for
the holders of shares of Company Common Stock reasonably acceptable to the
Company to receive the funds necessary to make the payments to such holders
pursuant to Section 2.4 upon surrender of their Certificates and/or Restricted
Stock Agreements. Parent will, on or prior to the Effective Time, deposit with
the Paying Agent the aggregate Merger Consideration to be paid in respect of all
of the shares of Company Common Stock outstanding at the Effective Time,
including shares covered by Company Restricted Stock Awards (whether vested or
unvested), but excluding shares cancelled pursuant to Section 2.4(b) (the
"Fund"). The Fund shall be invested by the Paying Agent as directed by Parent.
Any net profit resulting from, or interest or income produced by, such
investments, shall be payable to the Surviving Corporation. Parent shall replace
any monies lost through any investment made pursuant to this Section 2.5(a). The
Paying Agent shall make the payments provided in Section 2.4.
(b) Promptly after the Effective Time, the Surviving Corporation shall
cause to be mailed to each Person who was, at the Effective Time, a holder of
record of shares of Company Common Stock entitled to receive the Merger
Consideration pursuant to Section 2.4, including shares covered by Company
Restricted Stock Awards (whether vested or unvested), a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates and/or the Restricted Stock Agreements to the Paying Agent) and
instructions for use in effecting the surrender of the Certificates and/or the
Restricted Stock Agreements pursuant to such letter of transmittal. Upon
surrender to the Paying Agent of a Certificate and/or the Restricted Stock
Agreement, together with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, and such other documents
as may be required pursuant to such instructions, the holder of such Certificate
and/or the Restricted Stock Agreement shall be entitled to receive in exchange
therefor the Merger Consideration for each share of Company Common Stock
formerly evidenced by such Certificate and each share covered by a Company
Restricted Stock Award (whether vested or unvested), and such Certificate and/or
Restricted Stock Agreement shall then be cancelled. Until so surrendered, each
such Certificate and each Restricted Stock Agreement shall, at and after the
Effective Time, represent for all purposes, only the right to receive such
Merger Consideration. No interest shall accrue or be paid to any beneficial
owner of shares of Company Common Stock or any holder of any Certificate or any
Restricted Stock Agreement with respect to the Merger Consideration payable upon
the surrender of any Certificate or Restricted Stock Agreement. If payment of
the Merger Consideration is to be made to a Person other than the Person in
whose name the surrendered Certificate is registered on the
8
stock transfer books of the Company, it shall be a condition of payment that the
Certificate so surrendered shall be endorsed in blank or to the Paying Agent or
otherwise be in proper form for transfer and that the Person requesting such
payment shall have paid all transfer and other Taxes required by reason of the
payment of the Merger Consideration to a Person other than the registered holder
of the Certificate surrendered or shall have established to the satisfaction of
the Surviving Corporation that such Taxes either have been paid or are not
applicable. If any Certificate or Restricted Stock Agreement shall have been
lost, stolen or destroyed, upon making of an affidavit of that fact by the
Person claiming such Certificate or Restricted Stock Agreement to be lost,
stolen or destroyed and, if required by the Surviving Corporation or Parent, the
posting by such Person of a bond, in such reasonable amount as the Surviving
Corporation or Parent may direct, as indemnity against any claim that may be
made against it with respect to such Certificate or Restricted Stock Agreement,
the Paying Agent will issue in exchange for such lost, stolen or destroyed
Certificate or Restricted Stock Agreement the applicable Merger Consideration
such holder is entitled to receive pursuant to Section 2.4.
(c) At any time following the day that is one hundred eighty days after the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any portion of the Fund which had been made
available to the Paying Agent and not disbursed to holders of shares of Company
Common Stock (including, without limitation, all interest and other income
received by the Paying Agent in respect of all amounts held in the Fund or other
funds made available to it), and thereafter each such holder shall be entitled
to look only to the Surviving Corporation (subject to abandoned property,
escheat and other similar Laws), and only as general creditors thereof, with
respect to any Merger Consideration that may be payable upon due surrender of
the Certificates or Restricted Stock Agreements held by such holder. If any
Certificates or Restricted Stock Agreements shall not have been surrendered
immediately prior to such date on which the Merger Consideration in respect of
such Certificate or Restricted Stock Agreement would otherwise escheat to or
become the property of any Governmental Entity, any such cash, shares, dividends
or distributions payable in respect of such Certificate shall, to the extent
permitted by applicable Law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any Person previously entitled
thereto. Notwithstanding the foregoing, none of the Surviving Corporation,
Parent, Sub or the Paying Agent shall be liable to any holder of a share of
Company Common Stock for any Merger Consideration delivered in respect of such
share of Company Common Stock to a public official pursuant to any abandoned
property, escheat or other similar Law.
(d) At the Effective Time, the stock transfer books of the Company shall be
closed and thereafter there shall be no further registration of transfers of
shares of Company Common Stock on the records of the Company. From and after the
Effective Time, except for Parent, the holders of shares of Company Common Stock
outstanding immediately prior to the Effective Time, including shares covered by
Company Restricted Stock Awards (whether vested or unvested), shall cease to
have any rights with respect to such shares of Company Common Stock except as
otherwise provided herein or by applicable Law, and all cash paid pursuant to
this Article II upon the surrender or exchange of Certificates or Restricted
Stock Agreements shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Company Common Stock theretofore represented
by such Certificate or Restricted Stock Agreement.
(e) Parent, Sub, the Surviving Corporation and the Paying Agent, as the
case may be, shall be entitled to deduct and withhold from the Merger
Consideration otherwise payable pursuant to this Agreement to any holder of
shares of Company Common Stock, including shares covered by Company Restricted
Stock Awards (whether vested or unvested), such amounts that Parent, Sub, the
Surviving Corporation or the Paying Agent are required to deduct and withhold
with respect to the making of such payment under the Code, the rules and
regulations promulgated thereunder or any provision of state, local or foreign
tax Law. To the extent that amounts are so withheld by Parent, Sub, the
Surviving Corporation or the Paying Agent, such amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Company Common Stock in respect of which such deduction and withholding was made
by Parent, Sub, the Surviving Corporation or the Paying Agent.
9
SECTION 2.6. Company Stock Awards. Parent will, at or subsequent to the
Effective Time, cause the Surviving Corporation to make the payments set forth
in this Section 2.6.
(a) (i) Each outstanding Company Stock Award that is an option to acquire
Company Common Stock (a "Company Stock Option") shall be cancelled and shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted automatically into the right to receive an amount equal to the
difference between (A) the Merger Consideration multiplied by the number of
shares of Company Common Stock subject to such Company Stock Option and (B) the
exercise price per share of Company Common Stock subject to such Company Stock
Option multiplied by the number of shares of Company Common Stock subject to
such Company Stock Option (such amount, the "Company Stock Option
Consideration"). At the Effective Time, all Company Stock Options converted
pursuant to this Section 2.6(a) shall no longer be outstanding, and each holder
of an Option Agreement shall cease to have any rights with respect thereto,
except the right to receive the Company Stock Option Consideration in accordance
with this Section 2.6(a)(i).
(ii) Promptly after the Effective Time, the Surviving Corporation shall
cause to be mailed to each Person who was, at the Effective Time, a holder of a
Company Stock Option entitled to receive the Company Stock Option Consideration
pursuant to Section 2.6(a)(i) a form of letter of transmittal and instructions
for use in effecting the surrender of the agreements granting the Company Stock
Option (the "Option Agreements"). Upon surrender to the Surviving Corporation of
an Option Agreement, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions, the holder of such
Option Agreement shall be entitled to receive in exchange therefor the Company
Stock Option Consideration for the Company Stock Options formerly evidenced by
such Option Agreement, and such Option Agreement shall then be cancelled. No
interest shall accrue or be paid to any beneficial owner of Company Stock
Options or any holder of any Option Agreement with respect to the Company Stock
Option Consideration payable upon the surrender of any Option Agreement. If any
Option Agreement shall have been lost, stolen or destroyed, upon making of an
affidavit of that fact by the Person claiming such Option Agreement to be lost,
stolen or destroyed and, if required by the Surviving Corporation or Parent, the
posting by such Person of a bond, in such reasonable amount as the Surviving
Corporation or Parent may direct, as indemnity against any claim that may be
made against it with respect to such Option Agreement, the Surviving Corporation
will issue in exchange for such lost, stolen or destroyed Option Agreement the
applicable Company Stock Option Consideration such holder is entitled to receive
pursuant to Section 2.6(a)(i).
(b) At the Effective Time, the Surviving Corporation shall pay to each
participant in the Company's employee stock purchase plan (the "Company ESPP"),
in exchange for the cancellation of such participant's rights under the Company
ESPP, an amount in cash determined by multiplying (i) the Merger Consideration
by (ii) the number of shares (and fractional shares) of Company Common Stock
that could be purchased for the participant under the Company ESPP based on the
total contributions credited to the participant under the Company ESPP
immediately prior to the Effective Time and an exercise price of $33.78 per
share, and each participant's rights under the Company ESPP shall thereafter be
cancelled.
(c) At the Effective Time, the Surviving Corporation shall pay to each
participant in the Company's "Equity Swap Program" (i.e., notional shares
credited to the Deferred Stock Account under the Executive Incentive Plan (the
"ESP Shares")), in exchange for the cancellation of the ESP Shares, an amount
determined by multiplying (i) the Merger Consideration by (ii) the number of ESP
Shares credited to the participant (whether or not vested) immediately prior to
the Effective Time, and each ESP Share shall thereafter be cancelled.
(d) Parent, Sub, the Surviving Corporation and the Paying Agent, as the
case may be, shall be entitled to deduct and withhold from the Company Stock
Award Consideration otherwise payable pursuant to this Agreement to any holder
of shares of Company Stock Awards such amounts that Parent, Sub, the Surviving
Corporation or the Paying Agent are required to deduct and withhold with respect
to the making
10
of such payment under the Code, the rules and regulations promulgated thereunder
or any provision of state, local or foreign tax Law. To the extent that amounts
are so withheld by Parent, Sub, the Surviving Corporation or the Paying Agent,
such amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of Company Stock Awards in respect of which such deduction
and withholding was made by Parent, Sub, the Surviving Corporation or the Paying
Agent.
ARTICLE III.
THE SURVIVING CORPORATION
SECTION 3.1. Articles of Incorporation. At the Effective Time, the
Company Articles of Incorporation shall be amended and restated as set forth on
Exhibit B attached hereto, so that they shall be identical to the articles of
incorporation of Sub in effect immediately prior to the Effective Time and shall
be the articles of incorporation of the Surviving Corporation, until the same
shall thereafter be altered, amended or repealed in accordance with the VSCA or
the articles of incorporation of the Surviving Corporation.
SECTION 3.2. Bylaws. At the Effective Time, the Company Bylaws shall be
amended and restated as set forth on Exhibit C attached hereto, so that they
shall be identical to the bylaws of Sub in effect immediately prior to the
Effective Time and shall be the bylaws of the Surviving Corporation, until the
same shall thereafter be altered, amended or repealed in accordance with the
VSCA, the articles of incorporation of the Surviving Corporation or the bylaws
of the Surviving Corporation.
SECTION 3.3. Directors and Officers. From and after the Effective Time,
until the earlier of their resignation or removal or until their respective
successors are duly elected or appointed in accordance with applicable Law, (a)
the directors of Sub at the Effective Time shall be the directors of the
Surviving Corporation, and (b) the officers of Sub at the Effective Time shall
be the officers of the Surviving Corporation.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in the Company Disclosure Letter delivered by the
Company to Parent prior to the execution of this Agreement, the Company
represents and warrants to Parent and Sub as follows:
SECTION 4.1. Organization and Standing. The Company Disclosure Letter
contains a true, correct and complete list of all of the Company's directors and
officers and its jurisdiction of organization and other jurisdictions in which
it is qualified or licensed to do business. The Company (a) is a corporation
duly organized, validly existing and in good standing under the Laws of the
Commonwealth of Virginia, (b) has full corporate power and authority and all
necessary governmental approvals to own, lease and operate its properties and
assets and to conduct its business as presently conducted and (c) is duly
qualified or licensed to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except where failure to be so qualified or licensed
would not, individually or in the aggregate, have a Company Material Adverse
Effect. The Company has furnished or made available to Parent true and complete
copies of the Company Charter Documents, each as amended to date. The Company
Charter Documents are in full force and effect, and the Company is not in
violation of any provision therein.
SECTION 4.2. Authority for Agreement.
(a) The Company has all necessary power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and, subject to
obtaining the Required Vote, to consummate the Merger and the other transactions
contemplated by this Agreement. The execution, delivery and performance by the
Company of this Agreement, and the consummation by the Company of the Merger and
the other
11
transactions contemplated by this Agreement, have been duly authorized by all
necessary corporate action (including, without limitation, the unanimous
approval of the Board of Directors of the Company) and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the Merger or the other transactions contemplated herein (other
than, with respect to the Merger, the approval and adoption of the Plan of
Merger by the Required Vote and the filing of the Articles of Merger with the
SCC). This Agreement has been duly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by Parent and Sub,
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other similar Laws
affecting the enforceability of creditors' rights generally, general equitable
principles and the discretion of courts in granting equitable remedies
(regardless of whether the issue of enforceability is considered in a proceeding
at law or in equity).
(b) At a meeting duly called and held on May 14, 2005, the Board of
Directors of the Company unanimously (i) determined that this Agreement, the
Plan of Merger and the transactions contemplated herein, including the Merger,
are advisable, fair to and in the best interests of the Company and the Company
Shareholders, (ii) approved and adopted this Agreement, the Plan of Merger and
the transactions contemplated herein, including the Merger, and (iii)
recommended approval and adoption of this Agreement, the Plan of Merger and the
transactions contemplated thereby, including the Merger, by the Company
Shareholders.
(c) The Company Financial Advisor has delivered to the Board of Directors
of the Company its written opinion, dated as of the date of this Agreement,
that, as of such date and based on the assumptions, qualifications and
limitations contained therein, the consideration to be received by the Company
Shareholders in the Merger is fair to such holders, from a financial point of
view. A copy of such opinion is included in the Company Disclosure Letter.
SECTION 4.3. Capitalization. The authorized capital stock of the Company
consists of 150,000,000 shares of Company Common Stock and 25,000,000 shares of
Company Preferred Stock. As of May 13, 2005, (a) 28,250,380 shares of Company
Common Stock are issued and outstanding, all of which are duly authorized,
validly issued, fully paid and nonassessable and free of preemptive rights, (b)
no shares of Company Preferred Stock are issued and outstanding and (c) 948,657
shares of Company Common Stock were subject to Company Stock Awards outstanding
pursuant to the Company Stock Award Plans and 1,800,963 shares of Company Common
Stock were reserved and authorized for future issuance pursuant to the Company
Stock Award Plans. The Company Disclosure Letter sets forth a true and complete
list of the outstanding Company Stock Awards with the exercise prices and period
of exercisability, if applicable. Except as set forth above or in the Company
Disclosure Letter, there are no options, warrants, convertible securities,
subscriptions, stock appreciation rights, phantom stock plans or stock
equivalents or other rights, agreements, including shareholder rights
agreements, arrangements or commitments (contingent or otherwise) of any
character issued or authorized by the Company relating to the issued or unissued
capital stock of the Company or obligating the Company to issue or sell any
shares of capital stock of, or options, warrants, convertible securities,
subscriptions or other equity interests in, the Company. All shares of capital
stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. There are
no outstanding contractual obligations of the Company to repurchase, redeem or
otherwise acquire any shares of Company Stock or to pay any dividend or make any
other distribution in respect thereof. There are no voting trusts or other
agreements or understandings to which the Company is a party with respect to the
voting of the stock of the Company.
SECTION 4.4. Subsidiaries.
(a) The Company Disclosure Letter contains a true, correct and complete
list of each Subsidiary, all formal legal names of each Subsidiary, its type of
entity, its directors and officers, its jurisdiction of organization and other
jurisdictions in which it is qualified or licensed to do business. Each of the
Subsidiaries (i) is a corporation or other business entity duly organized,
validly existing and in good
12
standing under the Laws of the jurisdiction of its organization, (ii) has full
corporate power and authority and all necessary government approvals to own,
lease and operate its properties and assets and to conduct its business as
presently conducted and (iii) is duly qualified or licensed to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except where failure
to be so qualified or licensed would not, individually or in the aggregate, have
a Company Material Adverse Effect. The Company has furnished or made available
to Parent true and complete copies of the organizational documents of each
Subsidiary, each as amended to date. Such organizational documents are in full
force and effect, and no Subsidiary is in violation of any provision therein.
(b) The Company owns beneficially and of record all of the issued and
outstanding capital stock or other securities or equity interests of each
Subsidiary and does not own an equity interest in any other Person, other than
in (i) the Subsidiaries or (ii) any other Person not in excess of 1% of such
Person's outstanding equity interests. Each outstanding share of capital stock
or other securities or equity interests of each Subsidiary is duly authorized,
validly issued, fully paid and nonassessable and each such share or other equity
interest owned by the Company or another Subsidiary is free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or such other Subsidiary's voting
rights, charges and other encumbrances of any nature whatsoever.
SECTION 4.5. No Conflict. The execution and delivery of this Agreement by
the Company do not, and the performance of this Agreement by the Company and the
consummation of the Merger and the other transactions contemplated by this
Agreement will not, (a) conflict with or violate the Company Charter Documents
or equivalent organizational documents of any of the Subsidiaries, (b) subject
to Section 4.6, conflict with or violate any Law applicable to the Company or
any of the Subsidiaries or by which any property or asset of the Company or any
of the Subsidiaries is bound or affected, or (c) result in a breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, give to others any right of termination,
amendment, acceleration or cancellation of, result in triggering any payment or
other obligations, or result in the creation of a lien or other encumbrance on
any property or asset of the Company or any of the Subsidiaries pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries or
any property or asset of any of them is bound or affected, except in the case of
clauses (b) and (c) above for any such conflicts, violations, breaches, defaults
or other occurrences which could not, individually or in the aggregate, have a
Company Material Adverse Effect.
SECTION 4.6. Required Filings and Consents. The execution and delivery of
this Agreement by the Company do not, and the performance of this Agreement by
the Company will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Entity, except (a) for
applicable requirements, if any, of the Securities Act, the Exchange Act, Blue
Sky Laws and filing and recordation of appropriate merger documents as required
by the VSCA, (b) for those required by the HSR Act and any filing required under
the antitrust laws or investment notification laws of any applicable
jurisdiction, (c) for filings contemplated by Section 4.19 hereof, (d) any
applicable requirements of the U.S. Department of Transportation or of any state
with respect to the licensing or registration of motor carriers, which consents,
approvals, authorizations, permits, filings and notifications are set forth in
the Company Disclosure Letter, and (e) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
could not, individually or in the aggregate, have a Company Material Adverse
Effect.
SECTION 4.7. Compliance. Each of the Company and the Subsidiaries (a) has
been operated in compliance with all Laws applicable to the Company or any of
the Subsidiaries or by which any property, business or asset of the Company or
any of the Subsidiaries is bound or affected and (b) is not in default or
violation of any notes, bonds, mortgages, indentures, contracts, agreements,
leases, licenses, permits, franchises, or other instruments or obligations to
which the Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries or any property or asset of the Company or any of
13
the Subsidiaries is bound or affected, except for failures to comply or defaults
or violations that would not, individually or in the aggregate, have a Company
Material Adverse Effect.
SECTION 4.8. Litigation. There is no Litigation pending or, to the
Knowledge of the Company, threatened against or affecting the Company or any of
the Subsidiaries, except for such Litigation that would not, individually or in
the aggregate, have a Company Material Adverse Effect. There are no judgments,
orders, injunctions, decrees, stipulations or awards (whether rendered by a
court, administrative agency, or by arbitration, pursuant to a grievance or
other procedure) against or relating to the Company or any of the Subsidiaries,
except for such judgments, orders, injunctions, decrees, stipulations or awards
that would not, individually or in the aggregate, have a Company Material
Adverse Effect.
SECTION 4.9. Reports; Financial Statements.
(a) The Company and each Subsidiary, as necessary, has filed all forms,
reports, statements and documents required to be filed with any regulatory
authority established by Law in a foreign jurisdiction, except for cases where
the failure to make such filing would not, individually or in the aggregate,
have a Material Adverse Effect, or with the SEC since the Spin-Off Date (those
required to be filed with the SEC are collectively referred to as the "SEC
Reports," and together with any foreign jurisdiction reports, the "Government
Reports"), each of which complied in all material respects with the applicable
requirements of the Securities Act, and the rules and regulations promulgated
thereunder, or the Exchange Act, and the rules and regulations promulgated
thereunder, or, in the case of a foreign jurisdiction, the relevant Laws of that
jurisdiction, each as in effect on the date so filed. None of the Government
Reports (including, but not limited to, any financial statements or schedules
included or incorporated by reference therein) contained when filed any untrue
statement of a material fact or omitted to state a material fact required to be
stated or incorporated by reference therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(b) The principal executive officer of the Company and the principal
financial officer of the Company have made the certifications required by
Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley
Act"), and the rules and regulations of the SEC promulgated thereunder with
respect to the Company's filings pursuant to the Exchange Act. For purposes of
the preceding sentence, "principal executive officer" and "principal financial
officer" shall have the meanings given to such terms in the Sarbanes-Oxley Act.
(c) All of the Company Financial Statements, in each case, including any
related notes thereto, as filed with the SEC or with relevant authorities in
foreign jurisdictions, have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as may be
permitted by Form 10-Q of the SEC and subject, in the case of the unaudited
statements, to normal, recurring audit adjustments) and fairly present, in all
material respects, the consolidated financial position of the Company and its
Subsidiaries at the respective dates thereof and the consolidated results of its
operations and changes in cash flows for the periods indicated.
(d) There are no liabilities of the Company or any of the Subsidiaries of
any kind whatsoever, whether or not accrued and whether or not contingent or
absolute, that are material to the Company and the Subsidiaries, taken as a
whole, other than (i) liabilities disclosed or provided for in the Company
Financial Statements, (ii) liabilities disclosed in the SEC Reports, (iii)
liabilities incurred on behalf of the Company in connection with this Agreement
and the contemplated Merger, and (iv) liabilities incurred in the ordinary
course of business consistent with past practice since March 31, 2005, none of
which in the case of clause (iv) are, individually or in the aggregate,
reasonably likely to be material to the Company.
(e) The Company has heretofore furnished or made available to Parent and
listed in the Company Disclosure Letter a complete and correct copy of any
amendments or modifications which have not yet been filed with the SEC to
agreements, documents or other instruments which previously had been filed by
the Company with the SEC as exhibits to the SEC Reports pursuant to the
Securities Act and the
14
rules and regulations promulgated thereunder or the Exchange Act and the rules
and regulations promulgated thereunder.
SECTION 4.10. Absence of Certain Changes or Events. Except as
contemplated by this Agreement or as disclosed in the SEC Reports filed prior to
the date hereof, since December 31, 2004, the Company and the Subsidiaries have
conducted their respective businesses in the ordinary course and consistent with
prior practice and there has not been (a) any event or occurrence of any
condition that has had or would reasonably be expected to have a Company
Material Adverse Effect, (b) any declaration, setting aside or payment of any
dividend or any other distribution with respect to any of the capital stock of
the Company or any Subsidiary other than the expected payment of the Company's
second quarter dividend of $.04 per share of Company Common Stock on or about
June 16, 2005, (c) any material change in accounting methods, principles or
practices employed by the Company, or (d) any action of the type described in
Section 6.1(b) which had such action been taken after the date of this Agreement
would be in violation of such Section.
SECTION 4.11. Taxes.
(a) Each of the Company and the Subsidiaries has filed all income and other
material Tax Returns (determined both individually and in the aggregate) that it
was required to file. All Combined Groups have filed all income and other
material Tax Returns (determined both individually and in the aggregate) that
(i) it was required to file and (ii) for which any Taxes reflected thereon could
be assessed against one or more of the Company and the Subsidiaries. All such
Tax Returns were correct and complete in all material respects. All material
amounts of Taxes owed by any of the Company and the Subsidiaries (whether or not
shown on any Tax Return) have been paid if due or adequately provided for in the
Company Financial Statements in accordance with GAAP. None of the Company or any
of the Subsidiaries currently is the beneficiary of any extension of time within
which to file any Tax Return. No claim has ever been made by an authority in a
jurisdiction where the Company or any Subsidiary does not file Tax Returns that
it is or may be subject to taxation in that jurisdiction. There are no security
interests on any of the assets of any of the Company and the Subsidiaries that
arose in connection with any failure (or alleged failure) to pay any Tax.
(b) Each of the Company and the Subsidiaries has withheld and paid all
material amounts of Taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent contractor, creditor,
shareholder or other third party.
(c) There is no audit, dispute or claim concerning any material amount of
Tax liability of any of the Company or the Subsidiaries or, to the Knowledge of
the Company, for which any of such Persons could be held responsible either (i)
claimed or raised by any authority in writing or (ii) as to which any of the
directors, officers and employees responsible for Tax matters of the Company and
the Subsidiaries has knowledge, including after due inquiry of similar such
Persons of any Combined Group. The Company Disclosure Letter lists all income
and other material Tax Returns filed with respect to any of the Company and the
Subsidiaries for taxable periods ended on or after December 31, 2001, indicates
those Tax Returns that have been audited, and indicates those Tax Returns that,
to the Knowledge of the Company, currently are the subject of audit. The Company
and the Subsidiaries have delivered or made available to Parent correct and
complete copies of all federal income Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by any of the Company
and the Subsidiaries since January 1, 2003.
(d) None of the Company, any of the Subsidiaries or, to the Knowledge of
the Company, any Combined Group has waived any statute of limitations in respect
of Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency affecting or potentially affecting the Company or any Subsidiary.
(e) None of the Company or any of the Subsidiaries has filed a consent
under former Section 341(f) of the Code concerning collapsible corporations.
Neither the Company nor any of the Subsidiaries has made (for any open tax year)
any payments, is obligated to make any payments, or is a party to any
15
agreement that under certain circumstances could obligate it to make any
payments that will not be deductible under Sections 280G and 162(m) of the Code.
The Company has not been a United States real property holding corporation
within the meaning of Section 897(c)(2) of the Code during the applicable period
specified in Section 867(c)(1)(A)(ii) of the Code. Each of the Company, the
Subsidiaries and any Combined Group has disclosed on its federal income Tax
Returns all positions taken therein (with respect to the Company and the
Subsidiaries) that could reasonably be expected to give rise to a substantial
understatement of federal income Tax within the meaning of Section 6662 of the
Code. Neither the Company nor any of the Subsidiaries is a party to any Tax
allocation or sharing agreement with any Person other than the Company and the
Subsidiaries (excluding leases and similar agreements providing for the payment
of property or similar Taxes by the lessee or similar user of property). Neither
the Company nor any of the Subsidiaries (i) has been a member of an affiliated
group filing a consolidated federal income Tax Return (other than a group the
common parent of which was the Company) or (ii) has any liability for the Taxes
of any Person (other than any of the Company and the Subsidiaries) under
Treasury Regulation Section 1.1502-6 (or any Law), as a transferee or successor,
by contract, or otherwise (excluding leases and similar agreements providing for
the payment of property or similar Taxes by the lessee or similar user of
property).
(f) An election under Section 338(h)(10) of the Code was filed with respect
to a qualified stock purchase of the Company and its Subsidiaries (other than
Motor Cargo Industries, Inc. and its subsidiaries) for federal tax purposes, and
the Section 338(h)(10) election is effective for state income tax purposes in
all jurisdictions where state income tax returns are filed by the Company or
such Subsidiaries. Neither the Company nor any Subsidiary has knowledge through
any of its officers or employees responsible for Tax matters of any basis or
claim on which such election could be held to be invalid. In connection with the
transaction giving rise to such election, the Company (i) entered into a tax
allocation agreement that is currently binding on all of the parties thereto and
(ii) performed such valuations as it deemed prudent in connection with effecting
such election. The Company has provided true, correct and complete copies of all
such documentation to Parent and its representatives.
SECTION 4.12. Title to Personal Property. Except as set forth in the
10-K, the Company and each of the Subsidiaries have good and marketable title
to, or a valid leasehold interest in, all of their tangible personal properties
and assets reflected in the 10-K or acquired after December 31, 2004 (other than
assets disposed of since December 31, 2004 in the ordinary course of business
consistent with past practice), in each case free and clear of all mortgages,
liens, pledges, security interests, charges, claims, restrictions and
encumbrances of any nature whatsoever, except for (i) such as which secure
indebtedness and which are properly reflected in the 10-K and (ii) such other
liens, encumbrances and restrictions, if any, that would not, individually or in
the aggregate, have a Company Material Adverse Effect. The tangible personal
property and assets of the Company and the Subsidiaries are in good operating
condition and in a state of good maintenance and repair, ordinary wear and tear
excepted, and are usable in the regular and ordinary course of business, except
as would not, individually or in the aggregate, have a Company Material Adverse
Effect. The Company and the Subsidiaries either own, or have valid leasehold
interests in, all tangible personal properties and assets used by them in the
conduct of their respective businesses, except where the absence of such
ownership or leasehold interest could not, individually or in the aggregate,
have a Company Material Adverse Effect.
SECTION 4.13. Real Property.
(a) Except as set forth in the 10-K, the Company and the Subsidiaries have
good and marketable fee simple title to, or a valid leasehold interest in, all
of their real properties reflected in the 10-K or acquired after December 31,
2004, in each case free and clear of all title defects, liens, encumbrances and
restrictions, except for (i) liens, encumbrances or restrictions which secure
indebtedness and which are properly reflected in the 10-K; (ii) liens for Taxes
accrued but not yet payable; (iii) liens arising as a matter of Law in the
ordinary course of business with respect to obligations incurred after December
31, 2004, provided that the obligations secured by such liens are not
delinquent; and (iv) such other title defects, liens, encumbrances and
restrictions, if any, as individually or in the aggregate, would not have a
Company Material Adverse Effect.
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(b) The Company Disclosure Letter sets forth a true, correct and complete
list of all real property owned by the Company or a Subsidiary as of April 30,
2005 (collectively, the "Real Property") and a true and correct list of all real
property presently leased by each of the Company and the Subsidiaries
(collectively, the "Leased Real Property") identifying with respect to each
lease of such Leased Real Property the date of, the parties to, and any
amendments, modifications, extensions or other supplements to such lease. The
Company or a Subsidiary is the lessee under each of the leases for the Leased
Real Property. Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, the lease for each Leased Real Property is in
full force and effect and neither the Company nor any Subsidiary has sent or
received any written notice of any uncured default under any of the leases of
Leased Real Property to which it is party. Neither the Company nor any
Subsidiary has breached or is in default under any covenant, agreement, term or
condition of or contained in any lease of Leased Real Property to which it is a
party and there has not occurred any event that with the lapse of time or the
giving of notice or both would constitute such a default or breach, except for
such breaches or defaults that would not, individually or in the aggregate, have
a Company Material Adverse Effect. To the Knowledge of the Company, the
consummation of the transactions provided for herein will not create or
constitute a default under any real property lease covering the Leased Real
Property that requires payments by the Company or any Subsidiary in excess of
$250,000 per year.
(c) All improvements on the Real Property and the Leased Real Property
conform to all applicable state and local Laws or use restrictions, and the
applicable property is zoned for the various purposes for which the Real
Property and the Leased Real Property and improvements thereon are presently
being used, except as would not, individually or in the aggregate, have a
Company Material Adverse Effect.
(d) Neither the Company nor any Subsidiary has received any written notice
of any pending or threatened condemnations, planned public improvements,
annexation, special assessments, zoning or subdivision changes, or other adverse
claims affecting any of the Real Property or the Leased Real Property, except
where such adverse claims would not, individually or in the aggregate, have a
Company Material Adverse Effect.
(e) There is no private restrictive covenant or governmental use
restriction (including zoning) on all or any portion of any of the Real Property
or the Leased Real Property which prohibits the current use of the Real Property
or the Leased Real Property in any material respect.
(f) All licenses, permits and approvals required for the occupancy and
operation of the Real Property and the Leased Real Property (with appurtenant
parking uses) as presently being used have been obtained and are in full force
and effect, except where the failure to obtain such licenses, permits and
approvals or the failure to be in full force or effect would not, individually
or in the aggregate, have a Company Material Adverse Effect, and neither the
Company nor any Subsidiary has received written notices of violations in
connection with such items.
(g) Neither the Company nor any Subsidiary has in its possession any
studies or reports which indicate any material defects in the design or
construction of any of the improvements on the Real Property or the Leased Real
Property.
(h) No Person, other than Parent, has any right, option, right of first
refusal or any other contract or agreement, whether oral or written, with
respect to the purchase, assignment or transfer of all or any material portion
of each parcel of the Real Property or the Leased Real Property.
(i) Except as would not, individually or in the aggregate, have a Company
Material Adverse Effect, the Real Property or the Leased Real Property is not
subject to or affected by any special assessment for public improvements or
otherwise, whether or not presently a lien upon the Real Property or the Leased
Real Property. As of the date hereof, all due and payable taxes, water charges
and sewer charges affecting the Real Property have been paid, except where the
failure to pay any such taxes, water charges and sewer charges would not,
individually or in the aggregate, have a Company Material Adverse Effect.
17
(j) The Company has complied in all material respects with all applicable
Laws and restrictions pertaining to and affecting the Real Property which relate
to such subdivision, except as would not, individually or in the aggregate, have
a Company Material Adverse Effect.
(k) Company shall use commercially reasonable efforts to obtain, or cause
the applicable Subsidiary to obtain, and deliver to Parent at lease five
business days prior to Closing, a "Landlord's Estoppel Certificate and Consent"
in form reasonably acceptable to Parent and the Company from the lessor under
each of the leases for the Leased Real Property.
SECTION 4.14. Environmental Compliance and Disclosure.
(a) Except as would not, individually or in the aggregate, have a Company
Material Adverse Effect, each of the Company and the Subsidiaries (i) possesses,
and is in compliance with all permits, licenses and governmental authorizations
and has filed all notices that are required under Environmental Laws applicable
to the Company and the Subsidiaries, and (ii) is in compliance with all
applicable limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained therein or
contained in any Environmental Law, or in any order, decree, plan, notice,
permit or demand letter issued, entered, promulgated or approved thereunder,
including, but not limited to, with respect to the use, storage, treatment,
manufacture, generation, disposal and handling of Hazardous Materials.
(b) Except as would not, individually or in the aggregate, have a Company
Material Adverse Effect, (i) neither the Company nor any Subsidiary has received
written notice of actual or threatened liability under CERCLA or any similar
state or local statute or ordinance from any governmental agency or any third
party and (ii) to the Knowledge of the Company, there is no fact that could
reasonably be expected to result in a claim against the Company or any Company
Subsidiary under any Environmental Laws including, without limitation, CERCLA or
any similar local, state or foreign Law with respect to any on-site or off-site
location.
(c) Except as would not, individually or in the aggregate, have a Company
Material Adverse Effect, no Hazardous Materials have ever been, are being, or
are threatened to be spilled, released, discharged, disposed, placed or
otherwise caused to become located in buildings or the soil, sub-surface strata,
air, water or ground water under, or upon any plant, facility, site, area or
property currently or previously owned or leased by the Company or any
Subsidiary or on which the Company or any Subsidiary is conducting or has
conducted its business or operations.
(d) Neither the Company nor any Subsidiary has entered into or agreed to,
or does it contemplate entering into any consent decree or order, and neither
the Company nor any Subsidiary is subject to any judgment, decree or judicial or
administrative order relating to compliance with, or the cleanup of Hazardous
Materials under, any applicable Environmental Laws.
(e) Neither the Company nor any Subsidiary is subject to any administrative
or judicial proceeding pursuant to and neither the Company nor any Subsidiary
has been alleged to be in violation of applicable Environmental Laws or
regulations, either now or any time since the Spin-Off Date, other than
violations that would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(f) Except as would not, individually or in the aggregate, have a Company
Material Adverse Effect, (i) neither the Company nor any Subsidiary has received
written notice that it is subject to any claim, obligation, liability, loss,
damage or expense of whatever kind or nature, contingent or otherwise, incurred
or imposed or based upon any provision of any Environmental Law and arising out
of any act or omission of the Company or any Subsidiary, its employees, agents
or representatives or arising out of the ownership, use, control or operation by
the Company or any Subsidiary of any plant, facility, site, area or property
(including, without limitation, any plant, facility, site, area or property
currently or previously owned, leased, or otherwise operated upon by the Company
or any Subsidiary) and (ii) there is no basis for any such notice and none is
threatened or foreseen.
18
(g) Except as would not have, individually or in the aggregate, a Company
Material Adverse Effect, neither the Company nor any Subsidiary has paid any
fines, penalties or assessments since the Spin-Off Date pursuant to any
Environmental Law.
(h) None of the owned or leased real property, improvements and equipment
of the Company and the Subsidiaries contain any asbestos, PCBs, underground
storage tanks, open or closed pits, sumps or other containers on or under any
such real property, improvements or equipment, except where the presence of
asbestos, PBCs, underground storage tanks, open or closed pits, sumps or other
containers would not have, individually or in the aggregate, a Company Material
Adverse Effect.
(i) None of the Company and the Subsidiaries has imported, manufactured,
stored, used, transported, treated or disposed of any Hazardous Materials other
than in compliance with all Environmental Laws, except where the failure to so
comply would not have, individually or in the aggregate, a Company Material
Adverse Effect.
SECTION 4.15. Officers and Employees. Except as set forth in the SEC
Reports, none of the Company and the Subsidiaries is a party to or bound by any
Employee/Consulting Agreement, that obligates the Company or any Subsidiary to
pay in excess of $50,000 in any twelve month period under any circumstance. The
Company has provided to Parent true, correct and complete copies of each
Employee/Consulting Agreement so disclosed. None of the Company and the
Subsidiaries has received a claim from any Governmental Entity to the effect
that the Company or any Subsidiary has improperly classified any Person as an
independent contractor. To the Knowledge of the Company, none of the Company and
the Subsidiaries has made any oral commitments to any officers, employees or
former employees, consultants or independent contractors with respect to
compensation, promotion, retention, termination, severance or similar matters in
connection with the transactions contemplated by this Agreement. All officers
and management level employees of the Company and the Subsidiaries listed in
Section 4.15 of the Company Disclosure Letter are active on the date hereof.
SECTION 4.16. Employee Benefit Plans.
(a) The Company Disclosure Letter contains a true and complete list of each
Company Benefit Plan currently sponsored, maintained or contributed to by the
Company or any Subsidiary, including each "multiemployer pension plan", as
defined in Section 3(37) of ERISA, to which the Company or any Subsidiary
contributes or has an obligation to contribute and any Company Benefit Plan
covering current or former employees, consultants or independent contractors
whose principal workplace is or was outside the United States of America, (a
"Current Company Benefit Plan").
(b) With respect to each Current Company Benefit Plan identified on the
Company Disclosure Letter, the Company has heretofore delivered or made
available to Parent true and complete copies of the plan documents and any
amendments thereto (or if the plan is not written, a written description
thereof), any related trust or other funding vehicle, annual reports required to
be filed with any Governmental Entity with respect to such plan, the most recent
actuarial reports, funding and financial information returns and statements,
current material contracts with any parties providing services or insurance to
such plan, current plan summaries or summary plan descriptions, the most recent
determination letter received from the Internal Revenue Service with respect to
each such plan intended to qualify under Section 401 of the Code.
(c) The Company and the Subsidiaries have maintained (or caused to be
maintained) all employee data necessary to administer each Current Company
Benefit Plan, including data required to be maintained under Sections 107 and
209 of ERISA, and such data is true and correct and is maintained in a form
that, with reasonable modification, could be utilized by Parent to calculate
benefits.
(d) No Company Benefit Plan is or was subject to Title IV of ERISA or
Section 412 of the Code, nor is any Company Benefit Plan a "multiemployer
pension plan", as defined in Section 3(37) of ERISA, or subject to Section 302
of ERISA. Neither the Company, any Subsidiary, nor a predecessor in interest of
any of them has or has had an obligation to make contributions or reimburse
another employer, either directly or indirectly, including through
indemnification or otherwise, for making contributions to a plan
19
that is or was subject to Title IV of ERISA. Neither the Company nor any
Subsidiary has terminated or withdrawn from or sought a funding waiver with
respect to, and no fact exists that could reasonably be expected to result in a
termination or withdrawal from or seeking a funding waiver with respect to, any
Company Benefit Plan that is subject to Title IV of ERISA. Neither the Company
nor any Subsidiary has incurred, and no fact exists that reasonably could be
expected to result in, liability to the Company or a Subsidiary as a result of a
termination, withdrawal or funding waiver with respect to an ERISA Affiliate
Plan or a plan that is subject to Title IV of ERISA maintained by a predecessor
in interest of the Company or any Subsidiary.
(e) Each Company Benefit Plan has been established, registered, qualified,
invested, operated and administered in all material respects in accordance with
its terms and in material compliance with all Applicable Benefit Laws. None of
the Company and the Subsidiaries has incurred, and no facts exist which
reasonably could be expected to result in, any liability to the Company or any
Subsidiary with respect to any Company Benefit Plan or any ERISA Affiliate Plan,
including without limitation, any liability, tax, penalty or fee under ERISA,
the Code or any Applicable Benefit Law (other than to pay premiums,
contributions or benefits in the ordinary course under the Current Company
Benefit Plans identified in the Company Disclosure Letter), except as would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(f) To the Knowledge of the Company, no fact or circumstance exists that
could adversely affect the tax-exempt status of a Company Benefit Plan that is
intended to be tax-exempt. Further, each Company Benefit Plan intended to be
"qualified" within the meaning of Section 401(a) of the Code and the trusts
maintained thereunder that are intended to be exempt from taxation under Section
501(a) of the Code has received a favorable determination or other letter
indicating that the form of the Company Benefit Plan satisfies Section 401(a) of
the Code.
(g) No Company Benefit Plan provides medical, surgical, hospitalization,
death or similar benefits (whether or not insured) for current or former
employees, consultants, independent contractors, contingent workers or leased
employees (or any of their dependents, spouses or beneficiaries) of the Company
or any Subsidiary or any predecessor in interest of any of them for periods
extending beyond their retirement or other termination of service, other than
continuation coverage mandated by any Applicable Benefit Law and only for the
period of coverage required under such Law.
(h) All contributions or premiums required to be made by the Company or any
Subsidiary under the terms of each Company Benefit Plan or by Applicable Benefit
Laws have been made in a timely fashion in accordance with the terms of the
Company Benefit Plan and Applicable Benefit Law. The liabilities of each Current
Company Benefit Plan are either fully insured, fully funded by assets held in a
segregated account or trust or fully reserved as a liability on the books of the
Company or applicable Subsidiary in accordance with GAAP, considering each such
plan as material for purposes of applying GAAP reserve requirements.
(i) The Company or a Subsidiary has the right under the terms of each
Company Benefit Plan and under Applicable Benefit Law to amend, revise, merge or
terminate such plan (or its participation in such plan) or transfer the assets
of such plan to another arrangement, plan or fund at any time exclusively by
action of the Company or such Subsidiary.
(j) The execution, delivery and performance of, and consummation of the
transactions contemplated by, this Agreement will not (i) entitle any current or
former employee, director, officer, consultant, independent contractors,
contingent worker or leased employee (or any of their dependents, spouses or
beneficiaries) of the Company or any Subsidiary to severance pay, unemployment
compensation or any other payment, (ii) accelerate the time of payment or
vesting or (iii) increase the amount of compensation due any such individual.
(k) There is no pending or, to the Knowledge of the Company, threatened
complaint, claim (other than a routine claim for benefits), proceeding,
examination, audit, investigation or other proceeding or action of any kind in
or before any Governmental Entity with respect to any Company Benefit Plan and,
to
20
the Knowledge of the Company, there exists no state of facts that after notice
or lapse of time or both reasonably could be expected to give rise to any such
claim, investigation, examination, audit or other proceeding or to affect the
registration of any Company Benefit Plan required to be registered.
SECTION 4.17. Labor Relations.
(a) None of the employees of the Company or any Subsidiary have been, or
currently are, represented by a labor organization or group that was either
certified or voluntarily recognized by any labor relations board, including,
without limitation, the NLRB or any other Governmental Entity.
(b) None of the employees of the Company or any Subsidiary have been, or
currently are, a signatory to, or have had, or currently have, the terms of
their employment set by, a collective bargaining agreement with any trade union,
labor organization or group.
(c) Each collective bargaining agreement set forth in the Company
Disclosure Letter is in full force and effect, and no such collective bargaining
agreement is being renegotiated.
(d) Since January 1, 2002, no representation election petition or
application for certification has been filed by employees of the Company or any
Subsidiary or is pending with the NLRB or any other Governmental Entity and no
union organizing campaign or, to the Knowledge of the Company, other attempt to
organize or establish a labor union, employee organization or labor organization
or group involving employees of the Company or any Subsidiary has occurred, is
in progress or is threatened.
(e) There is not pending any (i) charge of an unfair labor practice, (ii)
investigation of a charge alleging any unfair labor practice, (iii) complaint
alleging any unfair labor practice, filed or initiated with or brought by the
NLRB or any other Governmental Entity or (iv) any threatened labor board
proceeding of any kind, including any such against the Company or any Subsidiary
or any of their supervisory employees or any trade union, labor union, employee
organization or labor organization claiming to represent the employees of the
Company or any Subsidiary; neither the Company nor any Subsidiary, nor any of
their supervisory employees has engaged in any unfair labor practice of any
kind, except as would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(f) No grievance or arbitration demand or proceeding, whether or not filed
pursuant to a collective bargaining agreement, has been filed, is pending or, to
the Knowledge of the Company, has been threatened, against the Company or any
Subsidiary, except as would not, individually or in the aggregate, have a
Company Material Adverse Effect.
(g) Since January 1, 2002, no labor dispute, walk out, strike, slowdown,
hand billing, picketing, work stoppage (sympathetic or otherwise), or other
"concerted action" involving the employees of the Company or any Subsidiary has
occurred, is in progress or has been, to the Knowledge of the Company,
threatened.
(h) No breach of contract and/or denial of fair representation claim has
been filed, or is pending or, to the Knowledge of the Company, threatened
against the Company, any Subsidiary or any trade union, labor union, employee
organization or labor organization representing the employees of the Company or
any Subsidiary.
(i) No claim, complaint, charge or investigation for unpaid wages, bonuses,
commissions, employment withholding taxes, penalties, overtime or other
compensation, benefits, child labor or record keeping violations has been filed
or is pending or, to the Knowledge of the Company, threatened against the
Company or any Subsidiary under the Fair Labor Standards Act, Davis-Bacon Act,
Walsh-Healey Act, Service Contract Act or any other Labor Law, except as would
not, individually or in the aggregate, have a Company Material Adverse Effect.
(j) No discrimination and/or retaliation claim, complaint, charge or
investigation has been filed or is pending or, to the Knowledge of the Company,
threatened against the Company or any Subsidiary under the 1866 or 1964 Civil
Rights Acts, the Equal Pay Act, the ADEA, the ADA, the FMLA, the FLSA, ERISA or
any other Labor Law, except as would not, individually or in the aggregate, have
a Company Material Adverse Effect.
21
(k) If the Company or any Subsidiary is a federal or state contractor
obligated to develop and maintain an affirmative action plan, to the Knowledge
of the Company, no discrimination claim, show cause notice, conciliation
proceeding, sanction or debarment proceeding has been threatened or filed or is
pending with the Office of Federal Contract Compliance Programs or any other
federal agency or any comparable state or foreign agency or court and no desk
audit or on-site review is in progress.
(l) No citation has been issued by OSHA against the Company or any
Subsidiary and no notice of contest, claim, complaint, charge, investigation or
other administrative enforcement proceeding involving the Company or any
Subsidiary has been filed or is pending or, to the Knowledge of the Company,
threatened against the Company or any Subsidiary under OSHA or any other
applicable Labor Law relating to occupational safety and health, except as would
not, individually or in the aggregate, have a Company Material Adverse Effect.
(m) No workers' compensation or retaliation claim, complaint, charge or
investigation has been filed or is pending against the Company or any
Subsidiary, except as would not, individually or in the aggregate, have a
Company Material Adverse Effect.
(n) No investigation or citation of the Company or any Subsidiary has
occurred and no enforcement proceeding has been initiated or is pending or, to
the Knowledge of the Company, threatened under federal or foreign immigration
Law, except as would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(o) Neither the Company nor any Subsidiary has taken any action that would
constitute a "mass layoff", "mass termination" or "plant closing" within the
meaning of WARN or otherwise trigger notice requirements or liability under any
federal, local, state or foreign plant closing notice or collective dismissal
Law.
(p) No wrongful discharge, retaliation, libel, slander or other claim,
complaint, charge or investigation that arises out of the employment
relationship between the Company or any Subsidiary and its respective employees
has been filed or is pending or, to the Knowledge of the Company, threatened
against the Company or any Subsidiary under any applicable Law, except as would
not, individually or in the aggregate, have a Company Material Adverse Effect.
(q) Each of the Company and the Subsidiaries has maintained and currently
maintains insurance the Company deems adequate as required by applicable Law
with respect to workers' compensation claims and unemployment benefits claims,
except as would not, individually or in the aggregate, have a Company Material
Adverse Effect.
(r) Each of the Company and the Subsidiaries is in compliance with all
applicable Labor Laws, except as would not, individually or in the aggregate,
have a Company Material Adverse Effect.
(s) Neither the Company nor any Subsidiary is liable for any liabilities,
judgments, decrees, orders, arrearage of wages or taxes, fines or penalties for
failure to comply with any of the Labor Laws, except as would not, individually
or in the aggregate, have a Company Material Adverse Effect.
(t) Each of the Company and the Subsidiaries has paid or accrued all
current assessments under workers' compensation legislation, and neither the
Company nor any Subsidiary has been subject to any special or penalty assessment
under such legislation which has not been paid, except as would not,
individually or in the aggregate, have a Company Material Adverse Effect.
SECTION 4.18. Contracts and Commitments. The Company Disclosure Letter
sets forth a true, correct and complete list of the following contracts to which
the Company or a Subsidiary is a party (including every amendment, modification
or supplement to the foregoing): (a) all contracts or agreements which limit or
restrict the Company, any Subsidiary or any officer or, to the Knowledge of the
Company, any key employee of the Company or any Subsidiary from engaging in any
line of business conducted by the Company or any Subsidiary in any jurisdiction,
(b) all franchising agreements, (c) any contract or agreement with any material
agent used to supplement the Company's transportation network which is not
terminable without penalty on sixty calendar days' or less notice, (d) any joint
venture or
22
partnership agreement or other similar agreement, (e) any contract pursuant to
which the Company or any Subsidiary provides for the indemnification or holding
harmless of any current or former officer, director or employee of the Company
or any Subsidiary, (f) agreements or arrangements for the purchase or sale of
any assets (other than in the ordinary course of business) with an individual
value in excess of $150,000 or an aggregate value in excess of $750,000, (g)
agreements, contracts or indentures relating to the borrowing of money by the
Company or any Subsidiary, (h) all exchange traded or over-the-counter swap,
forward, future, option, cap, floor or collar financial contracts, or any other
interest rate or foreign currency protection contract; (i) all licensing
agreements in connection with which Company and the Subsidiaries have made or
received payments, or are obligated to make or entitled to receive payments, in
excess of $100,000; and (j) other than contracts identified in the Company
Disclosure Letter pursuant to Section 4.16 or (a) through (i) of this Section
4.18, all other contracts, agreements or commitments, including customer
contracts, involving payments made by or to the Company or a Subsidiary of
$1,000,000 or more per year and not terminable without penalty on sixty calendar
days' or less notice. Except as set forth in an exhibit attached to the SEC
Reports or in the Company Disclosure Letter, neither the Company nor any
Subsidiary is a party to any agreement, arrangement or commitment which is
material to the businesses of the Company and the Subsidiaries taken as a whole.
The Company has delivered or made available true, correct and complete copies of
all such agreements, arrangements and commitments to Parent. Neither the Company
nor any of the Subsidiaries is in default under any such agreement, arrangement
or commitment which has had, or could reasonably be expected to have, a Company
Material Adverse Effect.
SECTION 4.19. Proxy Statement, Etc. None of the information supplied or
to be supplied by the Company for inclusion or incorporation by reference in the
Proxy Statement will, at the time such document is filed, cause such document to
contain any untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein not misleading; or, when first
mailed to the Company Shareholders, or, at the time of the Shareholders'
Meeting, cause the Proxy Statement or any amendment thereof or supplement
thereto to contain any untrue statement of a material fact, or omit to state any
material fact required to be stated therein necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All documents that the Company is responsible for filing with the
SEC and any other regulatory agency in connection with the Merger will comply as
to form in all material respects with the provisions of applicable Law and any
applicable rules or regulations thereunder, except that no representation is
made by the Company with respect to statements made therein based on information
supplied by Parent or with respect to information concerning Parent or Sub which
is incorporated by reference in the Proxy Statement.
SECTION 4.20. Intellectual Property.
(a) The Company Disclosure Letter sets forth a true and complete list of
(i) the Intellectual Property Rights and (ii) the Licensed Rights. The Company
represents and warrants that, except as would not, individually or in the
aggregate, have a Company Material Adverse Effect, (A) the Company and the
Subsidiaries have good and marketable title to the Intellectual Property Rights;
(B) the Company and the Subsidiaries possess licenses or other valid rights to
use the Licensed Rights; (C) the Intellectual Property Rights are free and clear
of any liens, claims, other than any claim as to the validity of any pending
application for patent, trademark, service mark, trade name or copyright
protection, which claim is made to the authority issuing such protection, which
claims are set forth in the Company Disclosure Letter, or encumbrances, are not
subject to any license (royalty bearing or royalty free) and are not subject to
any other arrangement requiring any payment to any Person or the obligation to
grant rights to any Person in exchange; (D) the Licensed Rights are free and
clear of any liens, claims, encumbrances or royalties arising from the action of
Company or any of the Subsidiaries; provided that the Licensed Rights may be
subject to royalties payable by Company or its Subsidiaries to the entity
granting such Licensed Rights to Company or its Subsidiaries, the method by
which royalties are calculated appearing in the document or attachments thereto
granting such Licensed Rights to Company or its Subsidiaries; and (E) the
Intellectual Property Rights and the Licensed Rights are all those rights
pertaining to patents, copyrights, trademarks, service marks, trade names, trade
secrets, databases, and Company Software that are
23
necessary to the conduct of the business of each of the Company, the
Subsidiaries and the Company's Affiliates as presently conducted. The validity
of the Intellectual Property Rights and title thereto and validity of the
Licensed Rights, (x) have not been questioned in any prior Litigation; (y) are
not being questioned in any pending Litigation; and (z) to the Knowledge of the
Company, are not the subject(s) of any threatened or proposed Litigation. Except
as would not, individually or in the aggregate, have a Company Material Adverse
Effect, the business of each of the Company and the Subsidiaries, as presently
conducted, does not infringe and, to the Knowledge of the Company, has not been
alleged to infringe any patents, trademarks, trade names, service marks or
copyrights or misappropriate any trade secret rights of others. The consummation
of the transactions contemplated hereby will not result in the loss or
impairment of any of the Intellectual Property Rights or the Company's or the
Subsidiaries' right to use any of the Licensed Rights, except where such losses
or impairments would not, individually or in the aggregate, have a Company
Material Adverse Effect. To the Knowledge of the Company, there are no third
parties using any of the Intellectual Property Rights material to the business
of the Company or the Subsidiaries as presently conducted.
(b) The Company Disclosure Letter lists all of the material Company
Proprietary Software. The Company has developed the Company Proprietary Software
through its own efforts, as described in Section 4.20(d), and for its own
account, and the Company and the Subsidiaries have all right, title and interest
in and to all intellectual property rights in the Company Proprietary Software,
free and clear of all mortgages, liens, pledges, security interests, charges,
claims, restrictions and encumbrances of any nature whatsoever, except for such
mortgages, liens, pledges, security interests, charges, claims, restrictions and
encumbrances that would not, individually or in the aggregate have a Company
Material Adverse Effect. The use of the Company Licensed Software and the use of
the Company Proprietary Software by the Company or its Subsidiaries does not
breach any terms of any license or other contract between the Company or any
Subsidiary and any third party, except for such breaches that would not,
individually or in the aggregate, have a Company Material Adverse Effect. The
Company and the Subsidiaries are in compliance with the terms and conditions of
all license agreements in favor of the Company and the Subsidiaries relating to
the Company Licensed Software, except where the failure to comply would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(c) To the Knowledge of the Company, the Company Proprietary Software does
not infringe any patent, copyright, trademark, trade name or service mark or
misappropriate any trade secret of any third party. The source code for the
Company Proprietary Software has been maintained in confidence.
(d) The Company Proprietary Software was: (i) developed by the employees of
the Company and the Subsidiaries working within the scope of their employment at
the time of such development; (ii) developed by agents, consultants, contractors
or others who have executed appropriate instruments of assignment in favor of
the Company or any Subsidiary as assignee that have conveyed to the Company or
such Subsidiary ownership of the intellectual property rights in the Company
Proprietary Software; or (iii) acquired by the Company or any Subsidiary in
connection with acquisitions in which the Company or any Subsidiary obtained
representations, warranties and indemnities that the Company reasonably deemed
appropriate from the transferring party relating to the title to such Company
Proprietary Software. Neither the Company nor any Subsidiary has received
written notice from any third party claiming any right, title or interest in the
Company Proprietary Software.
(e) Neither the Company nor any Subsidiary has granted rights in Company
Software to any third party.
SECTION 4.21. Insurance Policies. The Company Disclosure Letter contains
a complete and correct list of the Company Insurance Policies. The Company has
delivered or made available to Parent prior to the date hereof a complete and
accurate list of all insurance policies in force naming the Company or any of
the Subsidiaries or employees thereof as an insured or beneficiary or as a loss
payable payee or for which the Company or any Subsidiary has paid or is
obligated to pay all or part of the premiums. With respect to each Company
Insurance Policy, the Company Disclosure Letter specifies (a) the insurer, (b)
the amount of and nature of coverage, (c) the risk insured against, (d) the
deductible amount (if
24
any) and (e) the date through which coverage will continue by virtue of premiums
already paid. The Company and the Subsidiaries have, and, all times since the
Spin-Off Date, have had, in effect insurance coverage with reputable insurers
which, in respect of amounts, premiums, types and risks insured, the Company
believes constitutes reasonable coverage against all risks customarily insured
against by corporations comparable in size and operations to the Company and the
Subsidiaries. Neither the Company nor any Subsidiary has reached or exceeded its
policy limits for any insurance policies in effect at any time during the past
five years. Neither the Company nor any Subsidiary is required to maintain
pursuant to any agreement or otherwise, and does not maintain, insurance with
respect to any Customer Inventory. With respect to each Company Insurance
Policy, (i) neither the Company nor any Subsidiary has received written notice
of any pending or threatened cancellation or premium increase (retroactive or
otherwise) with respect thereto; (ii) the policy is legal, valid, binding,
enforceable and in full force and effect; (iii) the policy will continue to be
legal, valid, binding, enforceable and in full force and effect on identical
terms through the Closing and following the consummation of the transactions
contemplated herein; (iv) neither the Company, any Subsidiary, nor any other
party to any Company Insurance Policy is in breach or default (including with
respect to the payment of premiums or giving of notices), and no event has
occurred which, with notice, lapse of time or both, would constitute such a
breach or default, or permit termination, modification or acceleration, under
such policy; (v) no party has repudiated any provision thereof; (vi) there are
no pending claims against such insurance as to which insurers are defending
under reservation of rights or have denied liability; and (vii) there exists no
claim under such insurance policy that has not been properly filed by the
Company or any Subsidiary, except in the case of clauses (ii) through (vii)
above as would not, individually or in the aggregate, have a Company Material
Adverse Effect.
SECTION 4.22. Notes Receivable. There are no notes receivable of the
Company or any Subsidiary owing by any director, officer, shareholder or
employee of the Company or any Subsidiary, other than notes receivable of the
Company or any Subsidiary owing by any non-officer employee of the Company or
any Subsidiary issued in the ordinary course of business consistent with past
practice.
SECTION 4.23. Transactions with Affiliates. Except as set forth in the
SEC Reports (other than compensation and benefits received in the ordinary
course of business as an employee or director of the Company or the
Subsidiaries), no director, officer or other Affiliate or Associate of the
Company or any Subsidiary or any entity in which, to the Knowledge of the
Company, any such director, officer or other Affiliate or Associate, owns any
beneficial interest (other than a publicly held corporation whose stock is
traded on a national securities exchange or in the over-the-counter market and
less than 1% of the stock of which is beneficially owned by any such Persons)
has any interest in: (a) any contract, arrangement or understanding with, or
relating to the business or operations of, the Company or any Subsidiary; (b)
any loan, arrangement, understanding, agreement or contract for, or relating to,
indebtedness of the Company or any Subsidiary; or (c) any property (real,
personal or mixed), tangible, or intangible, used or currently intended to be
used in, the business or operations of the Company or any Subsidiary.
SECTION 4.24. Customer and Supplier Relations. Since December 31, 2004,
no customer of the Company or any Subsidiary has cancelled, terminated, or made
any threat to cancel or otherwise terminate its contract, or to decrease its
usage of the Company's or any Subsidiary's services or products that would
result in a Company Material Adverse Effect. Neither the Company nor any
Subsidiary has received any notice that, and, to the Knowledge of the Company,
there is not, any current customer or supplier may terminate or materially alter
its business relations with the Company or any Subsidiary, either as a result of
the transactions contemplated herein or otherwise, that would result in a
Company Material Adverse Effect.
SECTION 4.25. Ethical Practices. The Company and each Subsidiary is (and
has been at all times) in compliance with the Foreign Corrupt Practices Act (15
U.S.C. sec.sec. 78dd-1, -1 and -3). None of the Company, any Subsidiary or any
Representative thereof has offered or given, and, no Person has offered or given
on its behalf, anything of value to: (a) any foreign official, any foreign
political party or official thereof or any candidate for political office; or
(b) any Person, while knowing that all or a portion of such thing of value will
be offered, given, or promised, directly or indirectly, to any foreign official,
to any
25
foreign political party or official thereof, or to any candidate for foreign
political office for the purpose of the following: (i) influencing any act or
decision of such foreign official, political party, party official, or candidate
in his or its official capacity, inducing such foreign official, political
party, party official, or candidate to do or omit to do any act in violation of
the lawful duty of such foreign official, political party, party official, or
candidate, or securing any improper advantage or (ii) inducing such foreign
official, political party, party official, or candidate to use his or its
influence with a foreign government or instrumentality thereof to affect or
influence any act or decision of such government or instrumentality, in order to
assist the Company or any Subsidiary in obtaining or retaining business for or
with, or directing business to, any Person.
SECTION 4.26. Customs Matters. Since January 1, 2002, neither the Company
nor any of the Subsidiaries has acted as an "importer of record," as that term
is defined in 19 U.S.C. sec. 1484, on import entry documentation required by the
U.S. Bureau of Customs and Border Protection ("Customs"). The Company and each
Subsidiary possesses all Licenses required to conduct their respective
businesses in accordance with the Laws enforced by Customs, including 19 U.S.C.
sec. 1623, 19 U.S.C. sec. 1641 and 19 C.F.R. sec. 111, except as would not,
individually or in the aggregate, have a Company Material Adverse Effect. All
such Licenses are currently in full force and effect and no misrepresentations
were made by the Company or any Subsidiary of any material fact in obtaining
them, except as would not, individually or in the aggregate, have a Company
Material Adverse Effect. No administrative or judicial proceedings have been
instituted or, to the Knowledge of the Company, threatened or are contemplated
by Customs against the Company or any Subsidiary seeking fines, forfeitures,
liquidated damages, or penalties or the modification, revocation, or suspension
of any License required to conduct their respective businesses in accordance
with the Laws enforced by Customs, except for such administrative or judicial
proceedings that if resolved adversely to the Company or any Subsidiary would
not, individually or in the aggregate, have a Company Material Adverse Effect.
The Company and each Subsidiary is in material compliance with all Laws enforced
by Customs.
SECTION 4.27. Government Contracts.
(a) Neither the Company nor any Subsidiary has been suspended or debarred
from bidding on contracts or subcontracts for any Governmental Entity, nor, to
the Knowledge of the Company, has any suspension or debarment action been
commenced. There is no valid basis for the suspension or debarment of the
Company or any Subsidiary from bidding on contracts or subcontracts for any
Governmental Entity.
(b) Neither the Company nor any Subsidiary has, with respect to any
contracts or subcontracts for any Governmental Entity and within the preceding
three years, received a cure notice or show cause notice advising the Company or
any Subsidiary that it was in default or would, if it failed to take remedial
action, be in default under such contract or subcontract.
(c) Neither the Company nor any Subsidiary nor any of their principals (as
defined in the Federal Acquisition Regulation) has, within the preceding three
years, been convicted or had a civil judgment rendered against it for (i)
commission of fraud or a criminal offense in connection with obtaining or
attempting to obtain, or performing a federal, state or local government
contract or subcontract; (ii) violation of federal or state antitrust statutes
relating to the submission of offers; or (iii) commission of embezzlement,
theft, forgery, bribery, falsification or destruction of records, making false
statements, tax evasion, or receiving stolen property.
(d) Neither the Company nor any Subsidiary has any contract disputes
pending before any contracting office, agency or instrumentality of any
Governmental Entity.
SECTION 4.28. No Existing Discussions. As of the date hereof, the Company
is not engaged, directly or indirectly, in any negotiation, discussion or
exchange of information with any other party with respect to or in contemplation
of an Acquisition Proposal.
SECTION 4.29. Antitakeover Statutes. Each of the Company and the Board of
Directors of the Company has taken all action required to be taken by it to
exempt this Agreement and the transactions contemplated hereby from, and this
Agreement, the Plan of Merger and the transactions contemplated
26
hereby are exempt from, the requirements of, any "moratorium", "control share",
"fair price", "affiliate transaction", "business combination" or other
antitakeover laws and regulations of any state, including the provisions of
Articles 14 and 14.1 of the VSCA.
SECTION 4.30. Brokers. No broker, finder or investment banker (other than
the Company Financial Advisor) is entitled to any brokerage, finder's or other
fee or commission in connection with this Agreement, the Merger or the other
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company. The Company Disclosure Letter includes a complete and
correct copy of all agreements between the Company and the Company Financial
Advisor pursuant to which such firm would be entitled to any payment relating to
this Agreement, the Merger or the other transactions contemplated by this
Agreement.
SECTION 4.31. Vote Required. The affirmative vote of holders of a
majority of the shares of Company Common Stock entitled to vote on the approval
and adoption of this Agreement, the Plan of Merger and the Merger (the "Required
Vote") is the only vote or approval of the holders of any class or series of
capital stock of the Company necessary to approve and adopt this Agreement, the
Plan of Merger and the transactions contemplated hereby, including the Merger.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Each of Parent and Sub represents and warrants to the Company as follows:
SECTION 5.1. Organization and Standing. Each of Parent, Sub and UPSOA (a)
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, (b) has full corporate power and
authority to own, lease and operate its properties and assets and to conduct its
business as presently conducted and (c) is duly qualified or licensed to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the properties owned, leased or operated by it or the
nature of its business makes such qualification or licensing necessary, except
where the failure to be so qualified or licensed would not, individually or in
the aggregate, have a material adverse effect on Parent or Sub.
SECTION 5.2. Authority for Agreement. Such Person has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the Merger and the other
transactions contemplated by this Agreement. The execution, delivery and
performance by such Person of this Agreement, and the consummation by each such
Person of the Merger and the other transactions contemplated by this Agreement,
have been duly authorized by all necessary corporate action and no other
corporate proceedings on the part of such Person are necessary to authorize this
Agreement or to consummate the Merger or the other transactions contemplated by
this Agreement (other than, with respect to the Merger, the approval and
adoption of the Plan of Merger and the filing of the Articles of Merger with the
SCC). UPSOA, as the sole shareholder of Sub, has approved this Agreement, the
Plan of Merger and the transactions contemplated hereby. This Agreement has been
duly executed and delivered by such Person and, assuming due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of each of such Person enforceable against such Person in accordance
with its terms subject, as to applicable bankruptcy, insolvency, reorganization,
moratorium and similar Laws affecting the enforceability of creditors' rights
generally, general equitable principles and the discretion of courts in granting
equitable remedies (regardless of whether the issue of enforceability is
considered in a proceeding at law or in equity).
SECTION 5.3. No Conflict. The execution and delivery of this Agreement by
such Person does not, and the performance of this Agreement by such Person and
the consummation of the Merger and the other transactions contemplated by this
Agreement will not, (a) conflict with or violate the certificate of
incorporation or articles of incorporation, as applicable, or bylaws of such
Person, (b) conflict with or violate any Law applicable to such Person or by
which any property or asset of such Person is bound or
27
affected, or (c) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, give
to others any right of termination, amendment, acceleration or cancellation of,
or result in triggering any payment or other obligation, or result in the
creation of a lien or other encumbrance on any property or asset of such Person
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which such
Person is a party or by which such Person or any property or asset of either of
them is bound or affected, except in the case of clauses (b) and (c) for any
such conflicts, violations, breaches, defaults or other occurrences which would
not, individually or in the aggregate, prevent or materially delay the
performance by such Person of its respective obligations under this Agreement or
the consummation of the Merger or the other transactions contemplated by this
Agreement.
SECTION 5.4. Required Filings and Consents. The execution and delivery of
this Agreement by such Person do not, and the performance of this Agreement by
such Person will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Entity, except (a) for
applicable requirements, if any, of the Exchange Act, Blue Sky Laws and filing
and recordation of appropriate merger documents as required by the VSCA, (b) for
those required by the HSR Act and any filing required under the antitrust laws
or investment notification laws of any applicable jurisdiction, (c) for
applicable requirements, if any, required by the U.S. Department of
Transportation or any state with respect to the licensing or registration of
motor carriers, (d) for filings contemplated by Section 4.19 and (e) where
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not, individually or in the aggregate,
prevent or materially delay the performance by such Person of any of its
respective obligations under this Agreement or the consummation of the Merger or
the other transactions contemplated by this Agreement.
SECTION 5.5. Information Supplied. None of the information supplied or to
be supplied by such Person for inclusion or incorporation by reference in the
Proxy Statement will, at the time such document is filed, cause such document to
contain any untrue statement of a material fact, or omit to state any material
fact necessary to make the statements therein not misleading; or, when first
mailed to Company Shareholders or, unless promptly corrected at any time during
the pendency of the Shareholders' Meeting, cause the Proxy Statement or any
amendment thereof or supplement thereto to contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding the
foregoing, no representation or warranty is made by such Person with respect to
statements made or incorporated by reference therein based on information
supplied by the Company for inclusion or incorporation by reference in the
foregoing document.
SECTION 5.6. Brokers. Except for the Parent Financial Advisor, there is
no broker, finder or investment banker entitled to any brokerage, finder's or
other fee or commission payable by such Person in connection with this
Agreement, the Merger or the other transactions contemplated by this Agreement
based upon arrangements made by or on behalf of such person.
SECTION 5.7. Ownership of Sub. Sub was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement. Sub (a) has not
conducted, and will not prior to the Effective Time conduct, any business and
(b) has no, and prior to the Effective Time will have no, assets or liabilities,
except, in either case, in connection with the Merger. As of the Effective Time,
only shares of Sub common stock will be issued and outstanding. All of such
shares shall be owned directly by UPSOA.
ARTICLE VI.
COVENANTS
SECTION 6.1. Conduct of the Business Pending the Merger.
(a) The Company covenants and agrees that between the date of this
Agreement and the Effective Time unless Parent shall otherwise agree in writing
and except as contemplated, permitted or required by
28
this Agreement, (i) the business of the Company and the Subsidiaries shall be
conducted only in, and the Company and the Subsidiaries shall not take any
action except in, the ordinary course of business and in a manner consistent
with prior practice, (ii) the Company and the Subsidiaries shall use
commercially reasonable efforts to preserve intact their business organizations,
to keep available the services of their current officers and employees and to
preserve the current relationships of the Company and the Subsidiaries with
customers, suppliers and other persons with which the Company or the
Subsidiaries has business relations, in each case consistent with past practice
and (iii) the Company and the Subsidiaries will comply in all material respects
with all applicable Laws wherever their respective businesses are conducted,
including, without limitation, the timely filing of all reports, forms or other
documents with the SEC required pursuant to the Securities Act or the Exchange
Act.
(b) Without limiting the generality of Section 6.1(a) above, and except as
expressly provided or permitted by this Agreement or set forth in the Company
Disclosure Letter, the Company covenants and agrees that between the date of
this Agreement and the Effective Time the Company shall not, nor shall the
Company permit any of the Subsidiaries to, without the prior written consent of
Parent (i) other than regularly scheduled quarterly dividends not to exceed $.04
per share of Company Common Stock per fiscal quarter, declare or pay any
dividends on or make other distributions (whether in cash, stock or property) in
respect of any of its capital stock, except for dividends by a wholly owned
Subsidiary of the Company to the Company or another wholly owned Subsidiary of
the Company, (ii) split, combine or reclassify any of its capital stock or issue
or authorize or propose the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock; (iii) repurchase or
otherwise acquire any shares of its capital stock; (iv) issue, deliver or sell,
or authorize or propose the issuance, delivery or sale of, any shares of its
capital stock, including Company Preferred Stock, or any securities convertible
into any such shares of its capital stock, or any rights, warrants or options to
acquire any such shares or convertible securities or any stock appreciation
rights, phantom stock plans or stock equivalents, other than the issuance of
shares of Company Common Stock upon the exercise of Company Stock Options
outstanding as of the date of this Agreement, (v) take any action that would, or
could reasonably be expected to, result in any of the conditions set forth in
Article VII not being satisfied; (vi) amend the Company Charter Documents and
the organizational documents of the Subsidiaries; (vii) create, assume or incur
any indebtedness for borrowed money or guaranty any such indebtedness of another
person, other than (A) borrowings under existing lines of credit (or under any
refinancing of such existing lines) or (B) indebtedness owing to, or guaranties
of indebtedness owing to, the Company; (viii) make any loans or advances to any
other Person other than loans or advances between any Subsidiaries of the
Company or between the Company and any of the Subsidiaries and other than loan
or advances made in the ordinary course of business consistent with past
practices; (ix) except in the ordinary course of business, mortgage or pledge
any of its assets or properties; (x) merge or consolidate with any other entity
in any transaction, or sell any business or assets in a single transaction or
series of transactions in which the aggregate consideration is $500,000 or
greater, other than the sale of obsolete assets in the ordinary course of
business; (xi) change its accounting policies except as required by applicable
Laws or GAAP; (xii) make any change in employment terms for any of its directors
or officers; (xiii) alter, amend, create or terminate any obligations, other
than those incurred or entered into in the ordinary course of business, with
respect to compensation, severance, benefits, change of control payments or any
other payments to employees, directors or Affiliates of the Company or the
Subsidiaries or enter into any new, or amend any existing Employee/Consulting
Agreement; provided that any new, or amendments to existing, Employee/Consulting
Agreements may be entered into with non-officers in the ordinary course of
business; (xiv) alter, amend, create or terminate any Current Company Benefit
Plan except those required by Law or as contemplated in Section 6.16; (xv)
establish, adopt or amend any collective bargaining agreement; (xvi) other than
with respect to letters of credit and bonds listed in Section 4.18 of the
Company Disclosure Letter, amend or cancel or agree to the amendment or
cancellation of any contract set forth in Section 4.18 of the Company Disclosure
Letter, (xvii) pay, loan or advance (other than the payment of compensation,
directors' fees or reimbursement of expenses in the ordinary course of business)
any amount to, or sell, transfer or lease any properties or assets (real,
personal or mixed, tangible or intangible) to, or enter into any agreement with,
any of its officers or directors or any Affiliate or Associate of any of its
officers or directors; (xviii) form or
29
commence the operations of any business or any corporation, partnership, joint
venture, business association or other business organization or division
thereof; (xix) make any material tax election (other than in the ordinary course
of business consistent with past practice) or settle or compromise any tax
liability involving amounts in excess of $100,000 in the aggregate; or (xx) pay,
discharge, settle or satisfy any Litigation, liabilities or obligations (whether
absolute, accrued, asserted or unasserted, contingent or otherwise) involving
amounts in excess of $150,000 more than amounts, if any, reserved on the Company
Financial Statements.
SECTION 6.2. Access to Information; Confidentiality.
(a) From the date hereof to the Effective Time, the Company shall, and
shall cause the Representatives of the Company to, afford the Representatives of
Parent and Sub, upon reasonable notice, reasonable access at all reasonable
times to the officers, employees, agents, properties, offices and other
facilities, books and records of the Company and the Subsidiaries, and shall
furnish Parent and Sub with all financial, operating and other data and
information as Parent or Sub, through its Representatives, may reasonably
request. The Company shall furnish to Parent and Sub monthly financial and
operating data and information within fifteen days following the end of each
calendar month. Parent will remain subject to the terms of the Confidentiality
Agreement.
(b) No investigation pursuant to this Section 6.2 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
SECTION 6.3. Notification of Certain Matters. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(a) the occurrence, or nonoccurrence, of any event which would be likely to
cause any representation or warranty contained in this Agreement to be untrue or
inaccurate and (b) any failure by such party (or Sub, in the case of Parent) to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 6.3 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice. If any event or matter
arises after the date of this Agreement which, if existing or occurring at the
date of this Agreement, would have been required to be set forth or described in
the Company Disclosure Letter or which is necessary to correct any information
in the Company Disclosure Letter which has been rendered inaccurate thereby,
then the Company shall, for informational purposes only, promptly supplement, or
amend, and deliver to Parent the Company Disclosure Letter which it has
delivered pursuant to this Agreement. Neither the supplementation of the Company
Disclosure Letter nor any disclosure after the date hereof of the untruths of
any representation and warranty made in this Agreement shall operate as a cure
of (i) the failure to disclose information, nor (ii) any untrue representation
or warranty made herein.
SECTION 6.4. Further Assurances.
(a) Subject to the terms and conditions of this Agreement, upon the terms
and subject to the conditions hereof, each of the parties hereto shall use
commercially reasonable efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under Law to make effective the Merger and the other transactions
contemplated by this Agreement, including, without limitation, using
commercially reasonable efforts to obtain all licenses, permits, consents,
approvals, authorizations, qualifications and orders of each Governmental Entity
and parties to contracts with the Company and the Subsidiaries as are necessary
for the consummation of the Merger and the other transactions contemplated by
this Agreement and to fulfill the conditions set forth in Article VII. If at any
time after the Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers of each party to
this Agreement and the Surviving Corporation shall use commercially reasonable
efforts to take all such action. In furtherance and not in limitation of the
foregoing, each party hereto agrees to make as promptly as practicable an
appropriate filing of a Notification and Report Form pursuant to the HSR Act and
any filing required under the antitrust laws of any applicable jurisdiction with
respect to the transactions contemplated hereby.
30
(b) In connection with, and without limiting the foregoing, the Company
shall (i) take all actions necessary to ensure that no state antitakeover
statute or similar statute or regulation is or becomes operative with respect to
this Agreement, the Merger or any other transactions contemplated by this
Agreement and (ii) if any state antitakeover statute or similar statute or
regulation is or becomes operative with respect to this Agreement the Merger or
any other transaction contemplated by this Agreement, take all actions necessary
to ensure that this Agreement the Merger and any other transactions contemplated
by this Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Merger and the other transactions contemplated by
this Agreement.
SECTION 6.5. Board Recommendations.
(a) In connection with the Merger and the Shareholders' Meeting, the Board
of Directors of the Company shall (i) subject to Section 6.5(b), recommend to
the holders of the Company Common Stock to approve the Plan of Merger and this
Agreement and use commercially reasonable efforts to obtain the necessary
approvals by the Company Shareholders of the Plan of Merger and this Agreement
and (ii) otherwise comply with all legal requirements applicable to such
meeting.
(b) Neither the Board of Directors of the Company nor any committee thereof
shall, except as expressly permitted by this Section 6.5(b), (i) withdraw,
qualify or modify, or propose publicly to withdraw, qualify or modify, in a
manner adverse to Parent or Sub, the approval or recommendation of such Board of
Directors of the Company or any committee thereof of the Plan of Merger, this
Agreement or any other transaction contemplated by this Agreement, (ii) approve
or recommend, or propose publicly to approve or recommend, any transaction
involving an Acquisition Proposal (as hereinafter defined) from a third party
(an "Alternative Transaction"), or (iii) cause the Company to enter into any
letter of intent, agreement in principle, acquisition agreement or other similar
agreement (each, an "Acquisition Agreement") related to any Alternative
Transaction. Notwithstanding the foregoing, if prior to the approval of this
Agreement and the Plan of Merger by the Company Shareholders, the Board of
Directors of the Company determines in good faith, after it has received a
Superior Proposal in compliance with Section 6.9 and after consultation with and
having taken into consideration advice from independent outside legal counsel
with respect to its duties to the Company and the Company Shareholders under
applicable Virginia law, that such action is likely required for the Board of
Directors of the Company to comply with its duties to the Company and the
Company Shareholders under applicable Virginia law, the Board of Directors of
the Company may (subject to this and the following sentences) inform the Company
Shareholders that it no longer believes that the Merger is advisable and that it
no longer recommends approval of the Plan of Merger (a "Subsequent
Determination") and may enter into an Acquisition Agreement with respect to a
Superior Proposal, but only at a time that is after the fifth business day (or
the second business day, in the case of a material amendment to a Superior
Proposal) following Parent's receipt of written notice advising Parent that the
Board of Directors of the Company is prepared to accept a Superior Proposal.
Such written notice shall specify the material terms and conditions of such
Superior Proposal (and include a copy thereof with all accompanying
documentation, if in writing), identify the Person making such Superior Proposal
and state that the Board of Directors of the Company intends to make a
Subsequent Determination. During such five business day period (or two business
day period in the case of a material amendment), the Company shall provide an
opportunity for Parent to propose such adjustments to the terms and conditions
of this Agreement as would enable the Company to proceed with its recommendation
to the Company Shareholders without a Subsequent Determination. For purposes of
this Agreement, a "Superior Proposal" means any Acquisition Proposal (on its
most recently amended or modified terms, if amended or modified) made by a third
party to enter into an Alternative Transaction which the Board of Directors of
the Company determines in its good faith business judgment (based on, among
other things, the advice of an independent financial advisor) to be more
favorable to the Company Shareholders than the Merger from a financial point of
view (taking into account, among other things, whether, in the good faith
business judgment of the Board of Directors of the Company, after obtaining the
advice of such independent financial advisor, the third party is reasonably able
to finance the
31
transaction, and any proposed changes to this Agreement that may be proposed by
Parent in response to such Alternative Transaction).
(c) Nothing contained in this Section 6.5 shall prohibit the Company from
taking and disclosing to the Company Shareholders a position contemplated by
Rule 14(e)-2(a) promulgated under the Exchange Act or from making any disclosure
to the Company Shareholders if, in the good faith business judgment of the Board
of Directors of the Company, after consultation with independent outside legal
counsel, failure so to disclose would be inconsistent with applicable Law;
provided, however, neither the Company nor its Board of Directors nor any
committee thereof shall, except as specifically permitted by Section 6.5(b),
withdraw, qualify, or modify, or propose to withdraw, qualify or modify, its
position with respect to the Plan of Merger or this Agreement or approve or
recommend, or propose to approve or recommend an Alternative Transaction.
SECTION 6.6. Shareholder Litigation. Unless and until the Agreement is
terminated in accordance with Section 8.1 hereof, the Company shall give Parent
the opportunity to participate in the defense or settlement of any shareholder
Litigation against the Company and its directors relating to the transactions
contemplated by this Agreement or the Merger; provided, however, that no such
settlement shall be agreed to without Parent's consent, which consent will not
be unreasonably withheld.
SECTION 6.7. Indemnification.
(a) It is understood and agreed that all rights to indemnification by the
Company now existing in favor of each present and former director and officer of
the Company or its Subsidiaries as provided in the Company Charter Documents, in
each case as in effect on the date of this Agreement, or pursuant to any other
indemnification agreements in effect on the date hereof, copies of which have
been provided to Parent, shall survive the Merger and Parent shall (i) cause the
Surviving Corporation to continue in full force and effect for a period of at
least six years from the Effective Time and (ii) perform, or cause the Surviving
Corporation to perform, in a timely manner, the Surviving Corporation's
obligation with respect thereto. Parent and Sub agree that any claims for
indemnification hereunder as to which they have received written notice prior to
the sixth anniversary of the Effective Time shall survive, whether or not such
claims shall have been finally adjudicated or settled.
(b) Parent shall cause the Surviving Corporation to, and the Surviving
Corporation shall, maintain in effect for six years from the Effective Time, if
available, the current directors' and officers' liability insurance policies
covered by such policies (provided that the Surviving Corporation may substitute
therefor policies of at least the same coverage containing terms and conditions
which are not materially less favorable) with respect to matters occurring prior
to the Effective Time; provided, however, that in no event shall the Surviving
Corporation be required to expend pursuant to this Section 6.7(b) more than an
amount per year equal to two hundred fifty percent (250%) of current annual
premiums paid by the Company for such insurance. In the event that, but for the
proviso to the immediately preceding sentence, the Surviving Corporation would
be required to expend more than two hundred fifty percent (250%) of current
annual premiums, the Surviving Corporation shall obtain the maximum amount of
such insurance obtainable by payment of annual premiums equal to two hundred
fifty percent (250%) of current annual premiums. In lieu of Parent causing the
Surviving Corporation to maintain the policies as described above, Parent may
elect to cause the Company to purchase immediately prior to the Effective Time a
six-year "tail" pre-paid policy on terms and conditions not materially less
favorable than the current directors' and officers' liability insurance
policies, such policy to be effective as of the Effective Time.
(c) If the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
person, then, and in each such case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation shall assume the obligations
set forth in this Section 6.7.
(d) The rights of each current and former officer, director, employee or
agent under this Section 6.7 shall be in addition to any rights of such Person
under the Company Charter Documents or under Virginia
32
Law. The provisions of this Section 6.7 are intended to be for the benefit of,
and shall be enforceable by, each present and former director, officer, employee
and agent of the Company or its Subsidiaries, their heirs and their
representatives.
(e) From and after the Effective Time, Parent shall unconditionally
guarantee the timely performance of all obligations of the Surviving Corporation
under this Section 6.7.
SECTION 6.8. Public Announcements. Parent and the Company shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or the Merger and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required in order to comply with Law or any listing agreement
with a national securities exchange or trading system to which Parent or the
Company is a party. Notwithstanding anything to the contrary contained in this
Section 6.8, either party may respond to questions from employees or
stockholders or inquiries from financial analysts and media representatives that
is consistent with and no more expansive than then-existing public disclosures.
SECTION 6.9. Acquisition Proposals. The Company shall not, nor shall it
authorize or permit any of the Subsidiaries to, and shall instruct and use its
commercially reasonable efforts to cause its Representatives not to, directly or
indirectly, (a) solicit, initiate or knowingly encourage or knowingly take any
other action to facilitate the submission of any Acquisition Proposal or (b)
participate in or knowingly encourage any discussion or negotiations regarding,
or furnish to any Person any non-public information with respect to, or take any
other action to facilitate any inquiries or the making of, any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal,
provided that if the Company receives an Acquisition Proposal that the Board of
Directors reasonably believes may, upon clarification, constitute a Superior
Proposal, the Company may communicate in writing (with a copy to Parent) with
the Person making such Acquisition Proposal solely to the limited extent
necessary to obtain the necessary clarification; provided, however, that prior
to the approval of the Plan of Merger and this Agreement by the Company
Shareholders the foregoing shall not prohibit the Board of Directors of the
Company from furnishing information to, or entering into discussions or
negotiations with, any Person that makes an Acquisition Proposal that is
unsolicited or that did not otherwise result from a breach of this Section 6.9,
if, and to the extent that, (i) the Board of Directors of the Company, after
consultation with and having taken into consideration advice of independent
outside legal counsel, determines in its good faith business judgment that such
action is likely required for the Board of Directors of the Company to comply
with its duties to the Company and the Company Shareholders under applicable
Virginia law, (ii) prior to taking such action, the Company receives from such
Person an executed agreement in reasonably customary form relating to the
confidentiality of information to be provided to such Person; provided that such
confidentiality agreement with respect to an Acquisition Proposal shall not be
any less protective to the Company than the provisions of the Confidentiality
Agreement and (iii) the Acquisition Proposal is a Superior Proposal. The Company
shall provide prompt (but in any event by the following day) oral and written
notice to Parent of (A) the receipt of any such Acquisition Proposal and any
clarification, modification or amendment to an Acquisition Proposal, or any
inquiry which could reasonably be expected to lead to any Acquisition Proposal,
(B) the material terms and conditions of such Acquisition Proposal or inquiry,
(C) the identity of such Person making any such Acquisition Proposal or inquiry
and (D) the Company's intention to furnish information to, or enter into
discussions or negotiations with, such Person. The Company shall continue to
keep Parent informed of the status and details of any such Acquisition Proposal
or inquiry. The Company shall cease and cause to be terminated immediately all
existing discussions or negotiations with any Persons conducted heretofore with
respect to any Acquisition Proposal. For purposes of this Agreement,
"Acquisition Proposal" means other than the transactions contemplated by this
Agreement, any offer or proposal with respect to a merger, consolidation,
business combination, share exchange, tender offer, reorganization,
recapitalization, liquidation, dissolution or similar transaction involving the
Company, or any purchase or other acquisition of 10% or more of the consolidated
assets of the Company and its Subsidiaries or 10% or more of any class of equity
securities of the Company or any of its Subsidiaries.
33
SECTION 6.10. Shareholders' Meeting.
(a) The Company shall (i) cause the Shareholders' Meeting to be duly called
and held as soon as practicable following the date of this Agreement for the
purpose of voting on the approval and adoption of this Agreement and the Plan of
Merger and (ii) take all action necessary in accordance with applicable Law and
the Company Charter Documents to duly call, give notice of, and convene the
Shareholders' Meeting.
(b) The Company shall, at the direction of Parent, solicit from holders of
shares of Company Common Stock entitled to vote at the Shareholders' Meeting
proxies in favor of such approval and shall take all other action necessary or,
in the reasonable judgment of Parent, helpful to secure the vote or consent of
such holders required by the VSCA, the Company Charter Documents or this
Agreement to effect the Merger.
SECTION 6.11. Proxy Statement.
(a) The Company will as promptly as practicable following the execution of
this Agreement file the Proxy Statement with the SEC and will use commercially
reasonable efforts to respond to the comments of the SEC and to cause the Proxy
Statement to be mailed to the Company Shareholders at the earliest practical
time. The Company will notify the Parent promptly of the receipt of the comments
of the SEC, if any, and of any request by the SEC for amendments or supplements
to the Proxy Statement or for additional information with respect thereto, and
will supply the Parent with copies of all correspondence between the Company or
its Representatives, on the one hand, and the SEC or members of its staff, on
the other hand, with respect to the Proxy Statement or the Merger. If (i) at any
time prior to the Shareholders' Meeting, any event should occur relating to the
Company or any of the Subsidiaries which should be set forth in an amendment of,
or a supplement to, the Proxy Statement, the Company will promptly inform Parent
and (ii) if at any time prior to the Shareholders' Meeting, any event should
occur relating to Parent or Sub or any of their respective Associates or
Affiliates, or relating to the plans of any such persons for the Company after
the Effective Time that should be set forth in an amendment of, or a supplement
to, the Proxy Statement, Parent will promptly inform the Company, and in the
case of (i) or (ii) the Company will, upon learning of such event, promptly
prepare and file and, if required, mail such amendment or supplement to the
Company Shareholders; provided, however, that prior to such filing or mailing,
the Company and Parent shall consult with each other with respect to such
amendment or supplement and shall incorporate the other's comments thereon.
(b) The Company hereby represents that the Company Financial Advisor has,
subject to the terms of its engagement letter with the Company and the Board of
Directors of the Company, consented to the inclusion of references to its
opinion in the Proxy Statement. The Company and its counsel shall permit Parent
and its counsel to participate in all communications with the SEC and its staff,
including any meetings and telephone conferences, relating to the Proxy
Statement, the Merger or this Agreement.
SECTION 6.12. Shareholder Lists. The Company shall promptly upon the
request by Parent, or shall cause its transfer agent to promptly, furnish Parent
and Sub with mailing labels containing the names and addresses of all record
holders of shares of Company Common Stock and with security position listings of
shares of Company Common Stock held in stock depositories, each as of the most
recent practicable date, together with all other available listings and computer
files containing names, addresses and security position listings of record
holders and beneficial owners of shares of Company Common Stock. The Company
shall furnish Parent and Sub with such additional information, including,
without limitation, updated listings and computer files of the Company
Shareholders, mailing labels and security position listings, and such other
assistance as Parent, Sub or their agents may reasonably request.
SECTION 6.13. Undertakings of Parent. Parent shall perform, or cause to
be performed, when due all obligations of Sub under this Agreement.
SECTION 6.14. Director Resignations. The Company shall cause to be
delivered to Parent resignations of all the directors of the Company and the
Subsidiaries to be effective upon the Effective
34
Time. The Company shall cause such directors, prior to resignation, to appoint
new directors nominated by Parent to fill such vacancies.
SECTION 6.15. Company Stock Awards. As promptly as practicable following
the date hereof, the Company shall use commercially reasonable efforts to cause
all of the holders of Company Stock Awards to agree to the termination and
expiration of their Company Stock Awards immediately prior to the consummation
of the Merger in exchange for the Company Stock Award Consideration described in
Section 2.6.
SECTION 6.16. Employee Matters.
(a) Company Benefit Plan Contributions. Prior to the consummation of the
Merger, the Company shall (or shall cause the applicable Subsidiary to) (i) make
all contributions under any Current Company Benefit Plan, including any employer
matching and profit sharing contributions, required for periods ending on or
before the consummation of the Merger or (ii) with respect to each Current
Company Benefit Plan that is not fully funded or fully insured, fully reserve as
a liability on the books of the Company or applicable Subsidiary in accordance
with GAAP, considering each such plan as material for purposes of applying GAAP
reserve requirements, all liabilities for benefits accrued under such plan as of
the consummation of the Merger.
(b) Other Actions. Parent and the Company agree to take those actions
identified on Exhibit D attached hereto.
(c) Long-Term Incentive Plan Awards. The long-term incentive plan awards
granted on January 21, 2004 (the "LTIP Awards") shall be paid in accordance with
Section 6.16(c)(i) or, with the consent of the participant, shall be amended
prior to the consummation of the Merger to provide for payment in accordance
with Section 6.16(c)(ii).
(i) Subject to the provisions of Section 6.16(c)(ii), each LTIP Award
shall be paid to each participant on the consummation of the Merger on
account of achieving the target performance objectives. Each participant
shall be deemed to have earned the number of performance shares scheduled
to be earned on account of achieving the target performance objectives.
Each participant shall be deemed to have earned the cash payment scheduled
to be earned on account of achieving the target performance objectives.
Each participant shall receive a single sum payment equal to the cash
payout under the LTIP Award assuming achievement of the target performance
objectives plus an amount determined by multiplying (x) the Merger
Consideration by (y) the number of performance shares earned under the LTIP
Award assuming achievement of the target performance objectives. The amount
payable under this Section 6.16(c)(i) shall be paid in a single cash
payment at the Effective Time.
(ii) With the consent of a participant, the participant's LTIP Award
shall be amended to provide: (A) that such participant shall be deemed to
have earned the cash payment scheduled to be earned on account of achieving
the maximum performance objectives, (B) that such participant shall be
deemed to have earned the number of performance shares scheduled to be
earned on account of achieving the maximum performance objectives, and (C)
that such participant shall receive a single sum payment equal to the
amount described in the following sentence if the participant continues
employment with the Company or Parent (or any affiliate thereof) until the
second anniversary of the consummation of the Merger (or January 1, 2007,
in the case of the LTIP Award held by Leo Suggs if he consents to the
application of this Section 6.16(c)(ii)) or if the participant's employment
ends before such date, as applicable, on account of death, disability or a
termination without Cause or a resignation with Good Reason. The amount
payable to such participant is equal to the maximum cash payout under the
LTIP Award assuming achievement of the maximum performance objectives plus
an amount determined by multiplying (x) the Merger Consideration by (y) the
number of performance shares earned under the LTIP Award assuming
achievement of the maximum performance objectives. Any amount payable
pursuant to such amendment shall be paid in a single cash payment on the
second anniversary of the consummation of the Merger or, if such date is
not a
35
business day, on the immediately succeeding day (or January 2, 2007, in the
case of Leo Suggs). For purposes of the amended LTIP Awards and this
Section 6.16(c)(ii), the terms "Cause" and "Good Reason" shall have the
same meaning as set forth in the Stock Incentive Plan.
(d) Information. Prior to the consummation of the Merger, the Company
shall provide Parent, if available from existing records of the Company or any
Subsidiaries, the following:
(i) a schedule that contains a true and complete list of (A) all of
the officers of the Company and each Subsidiary as of the date hereof,
specifying their position, annual rate of compensation, tax withholding
status, date of birth, date of hire, social security number, home address,
work location, length of service, vacation days, employee benefit coverages
selected and such other information as is reasonably requested by the
Purchaser for each of them, (B) all of the employees (whether full-time,
part-time or otherwise) of the Company and each Subsidiary as of the date
hereof, specifying their position, status, annual salary, tax withholding
status, hourly wages, date of birth, date of hire, social security number,
home address, work location, length of service, vacation days, employee
benefit coverages selected and such other information as is reasonably
requested by the Parent for each of them and (C) all individuals who
provide services exclusively to the Company or any Subsidiary as
consultants or independent contractors as of the date hereof, specifying
the nature of the services performed and the consulting or other
independent contractor fees and any other information reasonably requested
by the Purchaser; and
(ii) true, correct and complete copies of each written consent by an
officer to background checks or drug testing by the Company or any
Subsidiary and any arbitration agreements or confidentiality agreements
between the Company or any Subsidiary and an officer, employee or former
employee of the Company or any Subsidiary.
ARTICLE VII.
CONDITIONS
SECTION 7.1. Conditions to the Obligation of Each Party. The respective
obligations of Parent, Sub and the Company to effect the Merger are subject to
the satisfaction of the following conditions, unless waived in writing by all
parties:
(a) This Agreement and the Plan of Merger shall have been approved and
adopted by the Required Vote;
(b) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or
other legal restraint or prohibition preventing the consummation of the
Merger shall be in effect;
(c) All actions by or in respect of or filings with any Governmental
Entity required to permit the consummation of the Merger shall have been
obtained or made (including the expiration or termination of any applicable
waiting period under the HSR Act and any pre-closing clearance required
under the antitrust laws of any applicable jurisdiction); and
(d) No Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any Law, executive order, decree or injunction (whether
temporary, preliminary or permanent) which is then in effect and has the
effect of making illegal, materially restricting or in any way preventing
or prohibiting the Merger.
SECTION 7.2. Conditions to Obligations of Parent and Sub to Effect the
Merger. The obligations of Parent and Sub to effect the Merger are further
subject to satisfaction or waiver at or prior to the Effective Time of the
following conditions:
(a) (i) The representations and warranties of the Company in this
Agreement (without giving effect to any materiality or Company Material
Adverse Effect qualifications) shall be true and correct as of the date of
this Agreement and as of the Effective Time (except for representations and
36
warranties which are as of a specific date, in which event, they shall be
true and correct as of such date), except for such inaccuracies in such
representations or warranties as, individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect; (ii)
the Company shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to Closing;
and (iii) the Company shall have delivered to Parent and Sub a certificate
to the effect that each of the conditions specified in clauses (i) and (ii)
of this Section 7.2(a) is satisfied in all respects, duly executed by an
authorized officer of the Company;
(b) There shall not be overtly threatened, instituted or pending any
action, proceeding, application or counterclaim by any Governmental Entity
before any court or governmental regulatory or administrative agency,
authority or tribunal which challenges or seeks to challenge, restrain or
prohibit the consummation of the Merger;
(c) There shall be no Company Stock Awards outstanding as of the
Effective Time; and
(d) The Company shall have caused to be delivered to Parent
resignations of all the directors of the Company and the Subsidiaries
effective as of the Effective Time.
SECTION 7.3. Conditions to Obligations of the Company to Effect the
Merger. The obligations of the Company to effect the Merger are further subject
to satisfaction or waiver at or prior to the Effective Time of the following
conditions:
(a) The representations and warranties of Parent and Sub in this
Agreement (without giving effect to any materiality or material adverse
effect qualifications) shall be true and correct as of the date of this
Agreement and as of the Effective Time (except for representations and
warranties which are as of a specific date, in which event, they shall be
true and correct as of such date), except for such inaccuracies in such
representations or warranties as, individually or in the aggregate, would
not reasonably be expected, individually or in the aggregate, to prevent or
materially delay the performance by Parent or Sub of any of its obligations
under this Agreement, the consummation of the Merger or the other
transactions contemplated herein;
(b) Parent and Sub shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or
prior to Closing; and
(c) Parent and Sub shall have delivered to the Company a certificate
to the effect that each of the conditions specified in Sections 7.3(a) and
(b) is satisfied in all respects, duly executed by an authorized officer of
each of Parent and Sub.
ARTICLE VIII.
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, whether before or
after approval of matters presented in connection with the Merger by the Company
Shareholders:
(a) By mutual written consent of duly authorized representatives of
Parent and the Company;
(b) By any of Parent, Sub or the Company if any court of competent
jurisdiction or other Governmental Entity shall have issued an order,
decree, ruling or taken any other action permanently restraining, enjoining
or otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and nonappealable; provided, however, that
the party terminating this Agreement pursuant to this Section 8.1(b) shall
use all commercially reasonable efforts to have such order, decree, ruling
or action vacated;
(c) By any of Parent, Sub or the Company if the Merger shall not have
been consummated on or before November 15, 2005; provided, however, that
the right to terminate this Agreement under this Section 8.1(c) shall not
be available to any party whose failure to fulfill any obligation under
this
37
Agreement has been the primary cause of, or resulted in, the failure to
consummate the Merger on or before such date;
(d) By Parent or Sub if the Board of Directors of the Company (i)
shall have withdrawn or shall have modified in a manner adverse to Parent
or Sub its approval or recommendation of the Plan of Merger or this
Agreement, (ii) causes the Company to enter into an Acquisition Agreement
with respect to an Acquisition Proposal, (iii) shall have approved or
recommended any Acquisition Proposal or (iv) shall have resolved to do any
of the foregoing;
(e) By any of the Company, Parent or Sub, if this Agreement and the
Plan of Merger shall fail to be approved and adopted by the Required Vote
at the Shareholders' Meeting;
(f) By Parent or Sub, if (i) any of the conditions set forth in
Section 7.2 shall have become incapable of fulfillment and shall not have
been waived by Parent and Sub, (ii) the Company shall breach in any
material respect any of its covenants or other obligations hereunder or
(iii) the Company shall breach any representation or warranty hereunder
(without giving effect to any materiality or Company Material Adverse
Effect qualifications) and such breach of a representation or warranty,
together with all other such breaches, would entitle Parent or Sub not to
consummate the transactions contemplated hereby under Section 7.2(a). The
foregoing notwithstanding, if in the case of clauses (ii) or (iii), the
breach giving rise to the right of termination is capable of being cured,
the Parent or Sub may not exercise its right of termination with respect to
such breach, unless within ten days after written notice of such breach to
the Company from Parent, such breach shall not have been cured in all
material respects or waived by Parent or Sub and the Company shall not have
provided reasonable assurance to Parent and Sub, in the reasonable
discretion of Parent and Sub, that such breach will be cured in all
material respects on or before the Effective Time;
(g) By the Company, if (i) any of the conditions set forth in Section
7.3 shall have become incapable of fulfillment and shall not have been
waived by the Company or (ii) Parent or Sub shall breach in any material
respect any of their respective obligations hereunder or (iii) Parent or
Sub shall breach any representation or warranty hereunder (without giving
effect to any materiality or material adverse effect qualifications) and
such breach of a representation or warranty, together with all other such
breaches, would entitle the Company not to consummate the transactions
contemplated hereby under Section 7.3(a). The foregoing notwithstanding, if
in the case of clauses (ii) or (iii), the breach giving rise to the right
of termination is capable of being cured, the Company may not exercise its
right of termination with respect to such breach unless within ten days
after written notice of such breach to Parent from the Company, such breach
shall not have been cured in all material respects or waived by the Company
and Parent or Sub, as the case may be, shall not have provided reasonable
assurance to the Company, in the reasonable discretion of the Company, that
such breach will be cured in all material respects on or before the
Effective Time; or
(h) By the Company if, in compliance with its obligations under
Sections 6.5 and 6.9, (i) the Board of Directors of the Company shall have
withdrawn or shall have modified in a manner adverse to Parent or Sub its
approval or recommendation of the Plan of Merger or this Agreement and (ii)
the Company shall have entered into an Acquisition Agreement with respect
to a Superior Proposal.
SECTION 8.2. Effect of Termination.
(a) If this Agreement is terminated pursuant to Section 8.1, this
Agreement shall forthwith be terminated and have no further effect, except
as specifically provided in this Section 8.2 and in Sections 9.10 and 9.11,
there shall be no liability on the part of any party hereto, provided that
nothing herein shall relieve any party from liability for any willful
breach hereof.
(b) If (i) Parent or Sub exercises its right to terminate this
Agreement under Section 8.1(d) or (ii) the Company exercises its right to
terminate this Agreement under Section 8.1(h), the Company shall pay to
Parent within five business days of Parent's demand thereof, the sum of (A)
all reasonable documented fees and expenses (including, without limitation,
reasonable fees and expenses
38
of counsel, accountants, investment bankers, experts and consultants)
incurred by Parent in connection with the Merger or related to the
authorization, preparation, negotiation, financing, execution and
performance of this Agreement and the transactions contemplated hereby (the
"Parent Expenses") up to a maximum amount of $1,750,000 and (B) the
Termination Fee, payable in same-day funds, as liquidated damages and not
as a penalty, to reimburse Parent for its time, expense and lost
opportunity costs of pursuing the Merger.
(c) If within nine months after termination of this Agreement either
by the Company pursuant to Section 8.1(c) or by any party pursuant to
Section 8.1(e), the Company shall enter into any agreement relating to, or
consummate, an Acquisition Proposal with a Person other than Parent or Sub,
then immediately prior to, and as a condition of, consummation of such
transaction the Company shall pay to Parent the Parent Expenses and the
Termination Fee, payable in same-day funds, as liquidated damages and not
as a penalty, to reimburse Parent for its time, expense and lost
opportunity costs of pursuing the Merger.
(d) Notwithstanding anything to the contrary set forth in this
Agreement, if the Company fails promptly to pay to Parent any amounts due
under this Section 8.2, the Company shall pay the costs and expenses
(including reasonable legal fees and expenses) in connection with any
action, including the filing of any lawsuit or other legal action, taken to
collect payment, together with interest on the amount of any unpaid fee or
obligation at the publicly announced prime rate of Citibank, N.A. in effect
from time to time from the date such fee or obligation was required to be
paid.
SECTION 8.3. Amendments. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto; provided,
however, that after approval of the Plan of Merger by the Company Shareholders,
no amendment may be made without the further approval of the Company
Shareholders if the effect of such amendment would be to reduce the Merger
Consideration or change the form thereof or if otherwise required by the VSCA.
SECTION 8.4. Waiver. At any time prior to the Effective Time, whether
before or after the Shareholders' Meeting, any party hereto, by action taken by
its board of directors, may (a) extend the time for the performance of any of
the covenants, obligations or other acts of any other party hereto or (b) waive
any inaccuracy of any representations or warranties or compliance with any of
the agreements, covenants or conditions of any other party or with any
conditions to its own obligations. Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party by its duly authorized
officer. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of such rights.
The waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
ARTICLE IX.
GENERAL PROVISIONS
SECTION 9.1. No Third Party Beneficiaries. Other than the provisions of
Section 6.7 hereof, nothing in this Agreement shall confer any rights or
remedies upon any Person other than the parties hereto.
SECTION 9.2. Entire Agreement. This Agreement and the Confidentiality
Agreement constitute the entire Agreement among the parties with respect to the
subject matter hereof and supersedes any prior understandings, agreements, or
representations by or among the parties, written or oral, with respect to the
subject matter hereof. The parties hereby agree that for purposes of this
Agreement (including, but not limited to conditions to Closing) neither party
has made to the other any representations, warranties or covenants or other
disclosures other than those contained in this Agreement or the Company
Disclosure Letter. No amendment, modification or alteration of the terms or
provisions of this Agreement or the
39
Company Disclosure Letter shall be binding unless the same shall be in writing
and duly executed by the parties hereto.
SECTION 9.3. Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties named herein and their respective
successors. No party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other parties; provided, however, that Sub may freely assign its rights to
another wholly owned subsidiary of Parent without such prior written approval
but no such assignment shall relieve Sub or Parent of any of its respective
obligations hereunder.
SECTION 9.4. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
SECTION 9.5. Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware, without regard
to principles of conflicts of Law thereof.
SECTION 9.7. Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
SECTION 9.8. Specific Performance. Each of the parties acknowledges and
agrees that the other party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other party shall be entitled to seek an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any action instituted in
any court of the United States or any state thereof having jurisdiction over the
parties and the matter, in addition to any other remedy to which it may be
entitled, at Law or in equity.
SECTION 9.9. Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
SECTION 9.10. Non-Survival of Representations and Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.1, as the case may be, except that (i) the agreements set
forth in Articles II and IX and Section 6.7 shall survive the Effective Time
indefinitely and (ii) the agreements set forth in Section 8.2 and in this
Article IX shall survive the termination of this Agreement indefinitely.
SECTION 9.11. Fees and Expenses. Except as provided in Section 8.2, all
costs and expenses incurred by the parties hereto in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses.
SECTION 9.12. Notices. All notices, communications and deliveries
hereunder shall be made in writing signed by or on behalf of the Party making
the same, shall specify the Section hereunder pursuant
40
to which it is given or being made, and shall be delivered personally or by UPS
Next Day Air (with evidence of delivery and postage and other fees prepaid) as
follows:
<Table>
To Sub
or Parent: 55 Glenlake Parkway, NE
Atlanta, Georgia 30328-3498
Attention: Mergers & Acquisitions Department
and Legal Department
and to: King & Spalding LLP
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: Michael J. Egan
Janet E. Taylor
To the Company: 1000 Semmes Avenue
Richmond, Virginia 23224
Attention: General Counsel
with a copy to: Hunton & Williams LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
Attention: Allen C. Goolsby
David M. Carter
</Table>
or to such other representative or at such other address of a party as such
party may furnish to the other parties in writing. Any such notice,
communication or delivery shall be deemed given or made (a) on the date of
delivery, if delivered in person, or (b) on the first business day after
delivery to a UPS customer service representative if sent by UPS Next Day Air.
41
IN WITNESS WHEREOF, the Company, Parent and Sub and have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
OVERNITE CORPORATION
By: /s/ LEO H. SUGGS
------------------------------------
Name: Leo H. Suggs
Title: CEO & President
UNITED PARCEL SERVICE, INC.
By: /s/ THOMAS W. DELBROOK
------------------------------------
Name: Thomas W. Delbrook
Title: Assistant Treasurer
OLYMPIC MERGER SUB, INC.
By: /s/ THOMAS W. DELBROOK
------------------------------------
Name: Thomas W. Delbrook
Title: Assistant Treasurer
42